Quizzol

QUESTION:

Suppose the price level falls but suppliers only notice that the price of their particular product has fallen. Thinking there has been a fall in the relative price of their product, they cut back on production. This is a demonstration of the _______.

a. classical theory of the long-run aggregate-supply curve

b. misperceptions theory of the short-run aggregate-supply curve

c. sticky-wage theory of the short-run aggregate-supply curve

d. sticky-price theory of the short-run aggregate-supply curve

ANSWER:

b. misperceptions theory of the short-run aggregate-supply curve

Posted by Cleveland on September 10, 2024