Based on the figure below. Starting from long-run equilibrium at point C, a favorable inflation shock that decreases inflation from ? to ?1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 

An increase in income taxes ________ employment and ________ potential GDP

A) increases; increases B) increases; does not change C) decreases; decreases D) does not change; does not change E) increases; decreases

Ford Motor Company started producing the Model A at plants scattered around the United States

A) to locate its production centers closer to its customers. B) because it was not able to attract skilled workers in Michigan (where its first plant was located). C) because diseconomies of scale at its initial River Rouge plant resulted in high production costs. D) to save on transport costs.