Refer to the above diagram. Assume that G and T1 are the relevant curves, the economy is currently at A, and the full-employment GDP is B. This economy has a(n):

When does the burden of a tax imposed on a good fall more heavily on sellers?

What will be an ideal response?

According to the text, the most serious cost of continued inflation in a democratic society is

A) its tendency to undermine social consensus and feed political conflict. B) the eventual recession that must inevitably occur as a result of the inflation. C) the open and disguised unemployment that accompanies it, especially among minorities and teenagers. D) the slowdown in the rate of economic growth that it causes. E) the steady rise in the cost of living that it entails.