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

question 186

Multiple Choice

According to the misperceptions theory of the short-run aggregate supply curve, if the price level increases less than people expect, how do firms change their behaviour?

• A) They believe that the relative price has decreased, so they increase production.
• B) They believe that the relative price has decreased, so they decrease production.
• C) They believe that the relative price has increased, so they increase production.
• D) They believe that the relative price has increased, so they decrease production.

---

Definitions:

Focus Group Method

A qualitative research technique that gathers a small group of people to discuss a particular topic or issue in depth, facilitated by a moderator, to gain diverse perspectives and insights.

Ethnographic Approaches

Ethnographic approaches involve immersive observation and detailed documentation of people in their cultural or social contexts to understand their behaviors and beliefs.

Human Communication Research

The study of how humans create, transmit, receive, and interpret messages through verbal and non-verbal means.

Conversation Analysis

A research approach that analyzes the rules governing conversational interactions.