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Suppose Firms Are Continually Surprised by Higher-Than-Expected Price Levels

Question 153

Multiple Choice

Suppose firms are continually surprised by higher-than-expected price levels.Which of the following might be true?


A) the consumer price index will rise
B) potential output will increase
C) potential output will decrease
D) actual output will be less than potential output in the long run
E) actual output will exceed potential output in the short run

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