The Phillips Curve Indicates That When the Labor Market Is

question 51

Multiple Choice

The Phillips curve indicates that when the labor market is ________,production costs will ________ and aggregate supply decreases.

• A)easy;rise
• B)easy;fall
• C)tight;fall
• D)tight;rise

---

Definitions:

Variable Costing

A costing method that includes only variable production costs (costs that vary with output) in the cost of goods sold and excludes fixed overhead costs.

Variable Costing

A costing method that includes only variable production costs (materials, labor, and variable manufacturing overhead) in product costs, excluding fixed overhead.

Net Operating Income

The company's profit remaining after operating costs are removed, but prior to the deduction of taxes and interest.

Fixed Manufacturing Overhead

Fixed manufacturing overhead includes the costs associated with manufacturing that do not vary with the level of production, such as rent, salaries, and utility costs.