If the price level increases more rapidly than expected,
A)output will fall
B)output will increase
C)output will not change
D)real wages will increase
E)none of the above

Question

Quizplus · Accepted Answer

When the price level increases more rapidly than expected, firms may see higher prices for their products and increase production, leading to an increase in output in the short run.

If the Price Level Increases More Rapidly Than Expected