The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B
B. recessionary; C
C. recessionary; A
D. expansionary; A
Answer: C
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Lower wages will a. decrease the demand for labor
b. decrease the quantity of labor demanded. c. increase the demand for labor. d. increase the quantity of labor demanded.
The wages and salaries that people earn differ partly because of differences in:
A. Wealth B. Ability C. Social Security payments D. In-kind transfer payments
For a perfectly competitive firm, the value of the marginal product of labor falls as more workers are hired because of the diminishing
A) output price. B) marginal physical product of labor. C) price of labor. D) marginal cost of production.
The normal life-cycle pattern of income reflects differences in earnings based on
a. race and education b. gender and education c. age and education d. race e. household size