Suppose That the Actual and Expected Price Levels Are Initially

question 165

Multiple Choice

Suppose that the actual and expected price levels are initially equal,and that the expected price level rises.Which of the following will occur over the long run? (Hint: Recall the actual price level is on the vertical axis.)

• 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.
• E)The short-run aggregate supply curve will become flatter.

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Definitions:

Personal Truths

Individual beliefs or perceptions that are held to be true by the person, regardless of their objective accuracy.

Intentional Messages

Communications that are deliberately sent or received with an awareness of the message's meaning by the sender.

Paralinguistic Cues

Non-verbal elements of communication used to modify meaning or convey emotion, such as tone of voice, facial expressions, and gestures.

Pitch

The perception of the frequency of a sound, allowing us to distinguish between high and low sounds.