Exhibit 11-2 -If the actual price level in Exhibit 11-2 is lower than the expected price level, then A)equilibrium output might be Y₂ in the short run B)equilibrium output might be Y₁ in the short run C)equilibrium output might be Y₃ in the short run D)potential output is less than actual output E)unemployment is below the natural rate

Question

Quizplus · Accepted Answer

When the actual price level is lower than expected, firms may produce less, leading to a lower equilibrium output like Y2 in the short run.

Exhibit 11-2 -If the Actual Price Level in Exhibit 11-2 Is Lower