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

Special Drawing Rights

A) are granted by the Fed to banks which want to trade in the foreign exchange markets. B) were eliminated when the Bretton Woods system broke down. C) are created by the IMF in its role as lender of last resort. D) were created by the Nixon administration on August 15, 1971.

By the permanent-income hypothesis, the MPC of transitory income is

A) k. B) j. C) kj. D) k - j. E) 0.