If the Actual Price Level Is Less Than the Expected

question 8

Multiple Choice

If the actual price level is less than the expected price level reflected in long-term contracts,_____.

• A)firms will find production more profitable in the short run than they had expected and will decrease the quantity of output supplied
• B)firms will find production less profitable in the short run than they had expected and will decrease the quantity of output supplied
• C)firms will find production more profitable in the short run than they had expected and will increase the quantity of output supplied
• D)resource owners will earn higher returns in the short run than they had expected and will decrease the quantity of resources supplied
• E)unemployment will increase in the short run as firms will substitute labor with capital inputs

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