In the Diagram

question 240

Multiple Choice

In the diagram,

• A) any rate of inflation is consistent with the natural rate of unemployment in the long run.
• B) inflation can occur, but disinflation cannot occur.
• C) unemployment rates exceeding the natural rate are permanent.
• D) unemployment rates less than the natural rate are permanent.

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Definitions:

Fixed Costs

Costs that do not change with the level of output, such as rent, salaries, and insurance premiums.

Short Run

A time period in which at least one factor of production is fixed, limiting the ability of a firm to adjust its output.

Maximize Profits

The goal of increasing the difference between revenue and expenses to the highest possible level.

Minimize Losses

a strategy or approach aimed at reducing the amount of financial or production losses to the lowest possible level.