According to Misperceptions Theory, If a Firm Thought That Inflation

question 20

Multiple Choice

According to misperceptions theory, if a firm thought that inflation was going to be 5 percent and actual inflation was 6 percent, how the firm may be affected?

• A)It may believe that the relative price has increased, so it would increase production.
• B)It may believe that the relative price has increased, so it would decrease production.
• C)It may believe that the relative price has decreased, so it would increase production.
• D)It may believe that the relative price has increased, so it would decrease production

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Definitions:

Power Influence

The capacity to affect the behavior, decisions, or thinking of others through authority, persuasion, or manipulation.

Objectives

Specific, measurable goals that are designed to achieve an overall aim or target.

Situation

A set of circumstances or a scenario in which events occur.

Dyadic Theories

refer to psychological theories that emphasize the interactive and reciprocal nature of two-party relationships, such as those between leaders and followers or between partners in a relationship.