When the economy's actual price level exceeds the expected price level in the short run, _____
A) the nominal wages of workers decline.
B) the nominal wages of workers increase.
C) firms decrease output below the potential level.
D) the economy produces the natural rate of output.
E) cyclical unemployment in the economy falls to zero.

Question

Quizplus · Accepted Answer

The Answer of When the economy's actual price level exceeds the expected price level in the short run, _____
A) the nominal wages of workers decline.
B) the nominal wages of workers increase.
C) firms decrease output below the potential level.
D) the economy produces the natural rate of output.
E) cyclical unemployment in the economy falls to zero.

When the Economy's Actual Price Level Exceeds the Expected Price