The self-correcting tendency of the economy means that falling inflation eventually eliminates:

The vertical distance between a firm's average total cost curve, ATC, and its average variable cost curve, AVC

A) decreases as output increases. B) is equal to its marginal cost, MC. C) is equal to its total fixed cost, TFC. D) is equal to its average product.

When aggregate demand declines, many firms may reduce employment rather than wages because wage reductions may:

A. reduce per-unit production costs. B. reduce worker morale and work effort, and thus lower productivity. C. increase the firms' cost of raising financial capital. D. reduce the demands for their products.