If the Actual Price Level Exceeds the Expected Price Level

question 217

Multiple Choice

If the actual price level exceeds the expected price level reflected in long-term contracts,

• A) firms will find production more profitable than they had expected and will decrease the quantity of output supplied
• B) firms will find production less profitable than they had expected and will decrease the quantity of output supplied
• C) firms will find production less profitable than they had expected and will increase the quantity of output supplied
• D) unemployment will decrease

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