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If Workers and Firms Adjust Their Expectations of Future Prices

question 94

True/False

If workers and firms adjust their expectations of future prices in a higher price level, the short-run aggregate supply curve shifts to the right.


Definitions:

Marginal Revenue Product

The additional revenue generated from using one more unit of input.

Marginal Product

The extra output generated from increasing a particular input by one unit while keeping all other inputs unchanged.

Output

The total amount of goods or services produced by a firm or economy over a specific period of time.

Derived Demand

The demand for a factor of production or intermediate good resulting from the demand for another good or service, such as the demand for steel being driven by the demand for automobiles.

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