The misperceptions theory of the short-run aggregate supply curve says that if the price level is higher than people expected, then some firms believe that the relative price of what they produce has
a. decreased, so they increase production.
b. decreased, so they decrease production.
c. increased, so they increase production.
d. increased, so they decrease production.
c
You might also like to view...
As a result of the superb economics essay that you wrote during this quarter, you won the Adam Smith prize of $100. The receipt of these funds would be an example of
A) the substitution effect being stronger than the income effect. B) the income effect being stronger than the substitution effect. C) a pure income effect. D) a pure substitution effect.
Imports depend
a. negatively on income. b. positively on income. c. negatively on the exchange rate. d. positively on the price of foreign currency. e. Both b and c.
Refer to Scenario 17.2. The lowest level of y* that can be set and still have only the high-productivity people meet it is
A) 90. B) 60. C) 30. D) 22.5. E) 15.
A line is tangent to a curve if it
a. crosses the curve at one point b. touches the curve at one point, without crossing it c. crosses the curve at a minimum of two points d. never touches the curve e. forms a right triangle with the curve