-Refer to the graph in the exhibit.Suppose the actual price level exceeds the expected price level.What might the equilibrium output be in the short run?

Question

-Refer to the graph in the exhibit.Suppose the actual price level exceeds the expected price level.What might the equilibrium output be in the short run? A) Y₁ B) Y₂ C) Y₃ D) 0

Quizplus · Accepted Answer

When the actual price level exceeds the expected price level, firms see higher than anticipated prices for their products. This typically leads to an increase in production as firms attempt to capitalize on the higher prices, moving the economy to a point of higher output in the short run, which is represented by C (Y₃) in the context of this question.

-Refer to the Graph in the Exhibit