According to the misperceptions theory of aggregate supply, if a firm thought that inflation was going to be 5 percent and actual inflation was 6 percent, then the firm would believe that the relative price of what it produce had
a. increased, so it would increase production.
b. increased, so it would decrease production.
c. decreased, so it would increase production.
d. decreased, so it would decrease production.
a
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Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed below.CustomerReservation Price($/Rental)A22B16C12D8E6F4 Suppose Island Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. If Island bikes can charge a different price in the morning and in the afternoon, then in the morning, it will rent out ________ bike(s) and charge ________ per bike.
A. 4; $8 B. 1; $22 C. 2; $16 D. 3; $12
The band Coldplay's funding of 10,000 mango trees in India to help sop up emissions related to the release of their CD, A Rush of Blood to the Head, is an example of fixed-production technology
a. True b. False
Which of the following contributed most to the large increases in poverty since 1960?
a. increases in air pollution and other externalities b. federal government budget deficits c. the increase in the number of elderly individuals d. rising poverty rates among households headed by females e. the increase in the number of households headed by females
Assume a one year U.S. bond pays 4.0% interest and a similar U.K. bond pays 5.2% interest. Which of the following changes will establish interest rate parity?
a. The British pound would be expected to appreciate by 1.2% against the U.S. dollar. b. The U.S. dollar would be expected to depreciate by 1.2% against the British pound. c. The British pound would be expected to depreciate by 1.2% against the U.S. dollar. d. The British pound would be expected to appreciate by 9.2% against the U.S. dollar. e. The U.S. dollar would be expected to appreciate by 9.2% against the British pound.