If the Price Level Is Higher Than Expected,firms Might Raise

question 81

Multiple Choice

If the price level is higher than expected,firms might raise their production in the short run if

• A)the nominal wage they pay their employees was set based on the expected price level.
• B)prices are costly to adjust and they have set their price at some time in the past but are not ready to change it.
• C)they believe that the price of their product has risen relative to the price of other products,when in fact the rise in the price of their product reflects an increase in the general price level.
• D)All of the above are correct.

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Definitions:

Language Comprehension

The ability to understand spoken, written, or signed language.

Temporal Lobes

Regions of the cerebral cortex located beneath the temples, involved in processing auditory information and encoding memory.

Somatosensory Cortex

A region of the brain located in the parietal lobe, responsible for processing sensory information from the body, such as touch, temperature, and pain.

Parietal Lobes

Regions of the brain located behind the frontal lobes, responsible for processing sensory information such as touch, temperature, and pain.