Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle's budget constraint is AC. If the price of a gardenburger is $7.50, the price of a beer is

Assuming that as a result of observed past increases in the aggregate price level, workers' expectation of the current price level rises. Then,

a. less labor will be supplied at each money wage because with the higher expectation about the aggregate price level since a given money wage corresponds to a lower real wage. b. the firm has to pay a higher money wage in order to obtain a given quantity of labor. c. more labor will be supplied at each money wage because with the higher expectation about the aggregate price level since a given money wage corresponds to a higher real wage. d. Both a and b e. Both b and c

Because of the automatic stabilizers, a decline in the level of economic activity will cause:

a. a reduction in tax revenues collected. b. an increase in government expenditures. c. a greater budget deficit. d. all of these.