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When the Economy's Actual Price Level Exceeds the Expected Price

Question 10

Multiple Choice

When the economy's actual price level exceeds the expected price level in the short run, _____


A) the nominal wages of workers decline.
B) the nominal wages of workers increase.
C) firms decrease output below the potential level.
D) the economy produces the natural rate of output.
E) cyclical unemployment in the economy falls to zero.

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