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

Question

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

Quizplus · Accepted Answer

If the actual price level is lower than expected, firms may reduce production, leading to a lower equilibrium output, such as Y₂, in the short run.

-Refer to the Graph in the Exhibit