Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.

Fill in the blank: ________ leads to speculation

A) Love B) Uncertainty C) Greed D) Money E) Sin

Suppose the real interest rate rises and the quantity of loanable funds increases. These changes could have been the result of

A) firms expecting higher future profits. B) firms expecting lower future profits. C) households expecting higher future income. D) in increase in the default risk.