When the Economy's Actual Price Level Exceeds the Expected Price

question 103

Multiple Choice

When the economy's actual price level exceeds the expected price level in the short run:

• A)the real wages of workers decline.
• B)the nominal wages of workers increase.
• C)firms decrease output below the potential level.
• D)the economy produces the natural rate of output.
• E)cyclical unemployment in the economy falls to zero.

---

Definitions:

Political Science

The academic discipline that studies governments, public policies, political processes, political behavior, and ideas about governance.

Liberal

In politics, a viewpoint or ideology favoring policies that emphasize individual freedoms, social justice, and the need for government intervention to achieve these goals.

Moderate

Neither extreme nor excessive, often referring to views, conditions, or amounts that are reasonable or average.

Conservative

In politics, it refers to someone favoring traditional views and values, tending to oppose change. In other contexts, it can also mean cautious or restrained.