Suppose firms are continually surprised by higher-than-expected price levels.Which of the following might be true?
A) the consumer price index will rise
B) potential output will increase
C) potential output will decrease
D) actual output will be less than potential output in the long run
E) actual output will exceed potential output in the short run
Correct Answer:
Verified
Q62: An expansionary gap is closed in the
Q99: Exhibit 10-3 Q101: If the expected price level exceeds the Q102: Exhibit 10-4 Q103: Wage agreements may cause costs to be Q105: Exhibit 10-4 Q106: The amount by which actual output falls Q107: An increase in short-run aggregate supply could Q108: An increase in short-run aggregate supply that Q109: Exhibit 10-5 Unlock this Answer For Free Now! View this answer and more for free by performing one of the following actions Scan the QR code to install the App and get 2 free unlocks Unlock quizzes for free by uploading documents
