AP Macroeconomics Question 93: Answer and Explanation

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Question: 93

7. If firms that make a particular product expect its price will be lower in the future,

  • A. this will cause the supply of the product to increase right now.
  • B. this will cause the supply of the product to decrease right now.
  • C. this will have no effect on the amount of the product supplied right now.
  • D. this will have no effect on the supply of the product now or later.
  • E. this will cause consumers to expect the price to be higher in the near future also.

Correct Answer: A

Explanation:

(A)