Exhibit 11-2 -If the actual price level in Exhibit 11-2 exceeds the expected price level, then A)equilibrium output is Y₂ in the short run B)equilibrium output is Y₁ in the short run C)the actual unemployment rate is below the natural rate D)potential output is greater than actual output E)the actual price level is less than the equilibrium price level

Question

Quizplus · Accepted Answer

When the actual price level exceeds the expected price level, firms are likely to produce more due to higher profits, leading to an output above potential output and an unemployment rate below the natural rate.

Exhibit 11-2 -If the Actual Price Level in Exhibit 11-2 Exceeds the 11-2