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.

During the financial crisis of 2007-2009, the Fed's quantitative easing program raised fears of inflation among investors, and to combat this fear, the Fed announced it would withdraw the monetary stimulus as the economy recovered

What happened to inflationary expectations during the latter part of the 2007-2009 recession? A) Inflationary expectations decreased based on the Fed's promise to withdraw stimulus money from the economy. B) Inflationary expectations increased to record high levels despite the Fed's promise to withdraw stimulus money from the economy. C) Inflationary expectations did increase, but the increase only returned expected inflation to its pre-recession level. D) Inflationary expectations decreased to the point where the Fed became worried about the economy becoming deflationary.

Inflation caused by an increase in aggregate spending is referred to as:

A.  Cost-push inflation B.  Anticipated inflation C.  Demand-pull inflation D.  Hyperinflation