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If the Expected Price Level Exceeds the Actual Price Level

Question 104

Multiple Choice

If the expected price level exceeds the actual price level in an economy, _____


A) firms increase production in the short run.
B) firms decrease production in the short run.
C) firms maintain production in the short run but increase prices.
D) firms maintain production in the short run but decrease prices.
E) firms pay higher prices to resources in the short run.

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