If resource suppliers and demanders find out that the actual price level exceeds the expected price level,they will take corrective actions that will:
A)cause the economy to move away from the potential output level.
B)raise the unemployment level above the natural rate of unemployment.
C)shift the aggregate demand curve of an economy.
D)shift the short-run aggregate supply curve of an economy.
E)lower the actual price level.

Question

Quizplus · Accepted Answer

If the actual price level exceeds the expected price level, suppliers will produce more in the short run which will eventually shift the short-run aggregate supply curve to the right, resulting in a lower price level and a higher output level. Therefore, option D is the correct choice.

If Resource Suppliers and Demanders Find Out That the Actual