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According the Lucas' Misperception Model,when Prices Unexpectedly Rise,suppliers Infer That

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According the Lucas' misperception model,when prices unexpectedly rise,suppliers infer that their relative prices have _____,which induces them to _____ output.


Definitions:

Normal Distribution

A probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Security Returns

The gains or losses on an investment over a specific period, including dividends, interest, and capital gains, usually expressed as a percentage.

Standard Deviation

A statistical measure that quantifies the variation or dispersion of a set of data points or investment returns.

Arithmetic Return

The simple average of a series of periodic returns of an investment.

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