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Suppose the Actual and Expected Price Levels Are Initially Equal

Question 45

Multiple Choice

Suppose the actual and expected price levels are initially equal, and the expected price level falls.Which of the following will occur over the long run?  


A)  The economy will move rightward along the short-run aggregate supply curve. 
B)  The economy will move leftward along the short-run aggregate supply curve. 
C)  The short-run aggregate supply curve will shift to the right. 
D)  The short-run aggregate supply curve will shift to the left.

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