Other things the same, the aggregate quantity of output supplied will decrease if the price level
a. is lower than expected so that firms believe the relative price of their output has increased.
b. is lower than expected so that firms believe the relative price of their output has decreased.
c. is higher than expected so that firms believe the relative price of their output has increased.
d. is higher than expected so that firms believe the relative price of their output has decreased.
b
You might also like to view...
The third round of quantitative easing, announced in September 2012, was focused on purchases of:
A) short-term Treasury bills B) long-term Treasury notes C) long-term Treasury notes and sales of short-term Treasury bills D) mortgage-backed securities
Marc is a high school graduate and currently works as a corrections officer at a local prison. He would like to go back to school to train to become a police officer someday. The best way to describe Marc is to say he is:
A. underemployed. B. a discouraged worker. C. unemployed. D. employed.
An expansionary monetary policy is most likely to produce an inflationary effect with little impact on output when the economy
A. is near full employment and the aggregate supply curve is horizontal. B. is near full employment and the aggregate supply curve is vertical. C. has substantial unemployment and the aggregate supply curve is vertical. D. has substantial unemployment and the aggregate supply curve is horizontal.
A straight-line production possibilities curve takes this shape because
A) the opportunity cost of producing a good is constant. B) the opportunity cost of producing more of a good is decreasing. C) resources are better suited for producing one output than another. D) resources are fixed.