Suppose That the Actual Price Level and the Expected Price

question 87

Multiple Choice

Suppose that the actual price level and the expected price level are initially equal, and that the expected price level rises.Which of the following will occur over the long run?  

• A) The economy will move rightward along the short-run aggregate supply curve. 
• B) The economy will move leftward along the short-run aggregate supply curve. 
• C) The short-run aggregate supply curve will shift to the right. 
• D) The short-run aggregate supply curve will shift to the left.

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Definitions:

Hot Chocolate

A warm beverage made from melted chocolate or cocoa powder mixed with milk or water and sugar.

Wheat Yield

defines the amount of wheat produced per unit area of land.

Bushels

A volume measure used primarily in agriculture, equivalent to approximately 35.24 liters in the United States.

Millimetres

A metric unit of length equal to one thousandth of a meter, used for measuring small distances.