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

Question

Quizplus · Accepted Answer

When the price level is lower than expected, firms may reduce production because they perceive lower profitability, leading to output falling below the natural level.

Both Models of Aggregate Supply Discussed in Chapter 13 Imply