If the Actual Price Level Exceeds the Expected Price Level

question 73

Multiple Choice

If the actual price level exceeds the expected price level reflected in long-term contracts,

• A)firms will find production more profitable than they had expected and will decrease the quantity of output supplied
• B)firms will find production less profitable than they had expected and will decrease the quantity of output supplied
• C)firms will find production less profitable than they had expected and will increase the quantity of output supplied
• D)resource owners,because they are making a lower profit than they had expected,will decrease the quantity of output supplied
• E)unemployment will decrease

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Definitions:

Basal Metabolic

The speed at which the body expends energy to sustain essential activities like breathing and temperature regulation when it is at rest.

Drive-reduction

A theory in psychology that explains motivation as being the result of drives, such as hunger or thirst, that an organism seeks to reduce to maintain homeostasis.

Arousal Theory

A theory of motivation that posits individuals seek to maintain an optimal level of arousal, not too high or too low.

Learning

The process of acquiring new understanding, knowledge, behaviors, skills, values, or preferences through study, experience, or teaching.