The misperceptions theory of the short-run aggregate supply curve says that the quantity of output supplied will decrease if the price level
a) increases by less than expected so that firms believe the relative price of their output has decreased.
b) increases by less than expected so that firms believe the relative price of their output has increased.
c) increases by more than expected so that firms believe the relative price of their output has increased.
d) increases by more than expected so that firms believe the relative price of their output has decreased.
Ans: a) increases by less than expected so that firms believe the relative price of their output has decreased.
You might also like to view...
The AD curve shows the sum of
A) the price level, employment, and real GDP. B) consumption expenditure, investment, and real GDP. C) consumption expenditure, investment, government expenditures on goods and services, and net exports. D) consumption expenditure, investment, the price level, and real GDP.
Marginal revenue is equal to:
A. the change in total revenue associated with a change in quantity. B. the change in total profits associated with a change in quantity. C. total revenue divided by its output. D. marginal cost.