Multiple Choice
Suppose the expected price level exceeds the actual price level.How will this affect output?
A) Firms will expand output, hoping that prices will rise.
B) Firms will expand output if some resources are fixed by contracts.
C) Firms will reduce output if some resource prices are fixed by contracts.
D) Firms will reduce output if workers suffer from money illusion.
Correct Answer:
Verified
Correct Answer:
Verified
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