Multiple Choice
According to the misperceptions theory of short-run aggregate supply, if a firm thought that inflation was going to be 5 percent and actual inflation was 6 percent, then the firm would believe that the relative price of what it produce had
A) increased, so it would increase production.
B) increased, so it would decrease production.
C) decreased, so it would increase production.
D) decreased, so it would decrease production.
Correct Answer:
Verified
Correct Answer:
Verified
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