Business, 03.07.2020 23:01 alethhaaa

In the short run, the quantity of output that firms supply can deviate from the natural level of output if the level in the economy deviates from the expected price level. Several theories explain how this might happen. For example, the asserts that output prices adjust more quickly to changes in the price level than wages do, in part because of long-term wage contracts. Suppose a firm signs a contract agreeing to pay its workers $15 per hour for the next year, based on an expected price level of 100 Year.

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In the short run, the quantity of output that firms supply can deviate from the natural level of out...

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