According to the Misperceptions Theory of the Short-Run Aggregate Supply

Multiple Choice

According to the misperceptions theory of the short-run aggregate supply curve,if a firm thought that inflation was going to be 4 percent and actual inflation was 2 percent,then the firm would believe that the relative price of what they produce had

A) increased, so they would increase production.
B) increased, so they would decrease production.
C) decreased, so they would increase production.
D) decreased, so they would decrease production.