Question

In the short run, the quantity of output supplied by firms can deviate from the natural level of output if the actual price level deviates from the expected price level in the economy. A number of theories explain reasons why this might happen.

Answer 1

Yes, that’s correct. In the short run, if the actual price level in an economy is different from what firms expected it to be, then the quantity of output supplied can deviate from its natural level. There are several theories that explain why this might happen.

Step-by-step explanation: