If the Actual Price Level Exceeds the Expected Price Level

question 45

Multiple Choice

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

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

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Definitions:

Dominion of Virginia

Refers to the English colonial possession in North America that existed from 1607 (with the founding of Jamestown) until the American Revolution, known for its role in the development of American democracy and plantation economy.

James II

King of England, Scotland, and Ireland who reigned from 1685 to 1688, his policies of religious tolerance toward Catholics led to the Glorious Revolution, which resulted in his deposition and the establishment of constitutional monarchy in Britain.

Nathaniel Bacon

led Bacon's Rebellion in 1676, an armed rebellion against the colonial government of Virginia, reflecting settlers' frustrations with Native American policies and governance.

Spanish

Pertaining to Spain, its people, culture, or language, which is a Romance language and the second most natively spoken language in the world.