The inflation rate
a. explains how prices are reacting to economic policies
b. indicates the level of prices charged by all firms in the economy
c. measures the annual percent increase in the average level of prices
d. measures how fast wages and incomes are rising
e. determines the prices that firms will offer to customers
C
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Fixed costs are sometimes referred to as _____ costs because once you've obligated yourself to them, they cannot be recovered.
Fill in the blank(s) with the appropriate word(s).
In the fooling model, suppose that from an initial AD/SAS/LAS equilibrium a sudden expansion of aggregate demand occurs. With fooling, we would find employment and the actual real wage in the labor market diagram by moving
A) "northeast" along the labor supply curve. B) "northwest" along the labor demand curve. C) "southeast" along the labor demand curve. D) "southwest" along the labor supply curve.