Multiple Choice
According to misperceptions theory, if a firm thought that inflation was going to be 3 percent and actual inflation was 4 percent, how may the firm be affected?
A) It may believe that the relative price has increased, so it would increase production.
B) It may believe that the relative price has increased, so it would decrease production.
C) It may believe that the relative price has decreased, so it would increase production.
D) It may believe that the relative price has decreased, so it would decrease production.
Correct Answer:
Verified
Correct Answer:
Verified
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