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Unformatted text preview: contracts are made. Factors of Production - Refers to capital and labor, as these are the inputs that lead to productivity. Investment - Money spent on the improvement of the capital stock. Labor - Physical effort supplied by workers producing output. Labor Force - The total number of people working at the production of output. Labor Market - The market for workers where the demand for labor and the supply for labor are equilibrated by the wage. Menu Costs - The financial costs to firms of having to reprint menus, catalogues, and other price-listing materials in response to economic changes. Natural Rate of Output - The rate of output when the factors of production, capital and labor, are used at their normal rates. Nominal Wage - The amount of money paid to a worker in terms of actual currency, not purchasing power....
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- Fall '08