Refer to Figure 14.1. Other things equal, a decrease in the target inflation rate is best represented as a movement from

Which of the following would cause aggregate demand to decrease?

A) The government increases taxes on both business and personal income. B) A drop in the foreign exchange value of the dollar C) The Fed increases the amount of money in circulation. D) Businesses and households believe that the economy is headed for good times, so they begin to feel increased security about their jobs.

If people work less as the wage rate increases, their labor supply curves are backward bending

Indicate whether the statement is true or false