If a firm is hiring in a perfectly competitive labor market, the firm's marginal labor cost (or marginal resource cost) curve slopes downward

The income effect implies that there is a positive relationship between

A) income and the unemployment rate. B) the unemployment rate and the inflation rate. C) aggregate supply and aggregate demand. D) monetary growth and interest rates.

Suppose the consumer price index (CPI) stands at 250 this year. If the inflation rate is 10 percent, then next year's CPI will equal:

a. 250. b. 260. c. 275. d. 500.