Referring to Figure 19.2, the effect of a decrease in Japanese prices is represented by a movement from point

Monopolistic competition is characterized by:

A. large markets. B. heterogeneous products. C. no free entry. D. employing labor from a perfectly competitive labor market.

A worker would be hurt least by inflation when the:

A. worker is protected by fixed annual increases in wages and benefits in an employment contract. B. government increases the level of social security retirement benefits to correct for the effects of anticipated inflation. C. worker anticipates inflation and increases savings at the bank. D. worker is protected by a cost-of-living adjustment clause in an employment contract.