If the Expected Price Level Exceeds the Actual Price Level

question 118

Multiple Choice

If the expected price level exceeds the actual price level in an economy,_____.

• A)firms increase production in the short run
• B)firms decrease production in the short run
• C)firms maintain production in the short run but increase prices
• D)firms maintain production in the short run but decrease prices
• E)firms raise prices in the short run.

---

Definitions:

Hypnosis

A trance-like state characterized by heightened focus, concentration, and suggestibility.

Elaborative Rehearsal

A memory technique that involves thinking about the meaning of the information and connecting it to other knowledge the person has, to better retain the information.

Tip-Of-The-Tongue Effect

A cognitive phenomenon where a person cannot fully retrieve a word or name but has a partial recall or feels that retrieval is imminent.

Encoding Failure

The inability to recall specific information because it was not encoded into memory effectively.