With the Lucas supply function, a price surprise means
A) actual price is greater than expected price.
B) actual price is less than expected price.
C) actual price equals expected price.
D) actual price is either greater than or lower than expected price.

Question

Quizplus · Accepted Answer

The Lucas supply function posits that output is influenced by unexpected changes in the price level, meaning actual prices deviating from expected prices, either being higher or lower.

With the Lucas Supply Function, a Price Surprise Means