Both models of aggregate supply discussed in Chapter 13 imply that if the price level is lower than expected, then output natural rate of output.
A)exceeds the
B)falls below the
C)equals the
D)moves to a different

Question

Quizplus · Accepted Answer

Both models of aggregate supply suggest that when the price level is lower than expected, firms produce less because they are receiving lower prices for their goods than anticipated, leading to output falling below the natural rate of output.

Both Models of Aggregate Supply Discussed in Chapter 13 Imply