If prices were rising at 5% per year during a recession, which of the following responses from firms would help facilitate the economic recovery, protect worker morale, AND reduce the firm's real labor costs?

Monetary policy refers to the actions taken by the Treasury Department to set the level of the money supply

Indicate whether the statement is true or false

Workers and firms both expect that prices will be 2.5% higher next year than they are this year. As a result,

A) aggregate demand will increase by 2.5%. B) the purchasing power of wages will rise if wages increase by 2.5%. C) workers will be willing to take lower wages next year, but not lower than a 2.5 percent decrease. D) the short-run aggregate supply curve will shift to the left as wages increase.