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

In U.S. recessions, growth in total consumption is ________, which is ________ with the workings of the permanent-income and life-cycle hypotheses

A) largely uninterrupted, perfectly consistent B) largely uninterrupted, rather inconsistent C) noticeably reduced, perfectly consistent D) noticeably reduced, rather inconsistent

Consider the two graphs above. Suppose that financial liberalization enables more businesses to access credit markets. This would ________ the desired level of the capital stock, as depicted in graph ________

A) increase; B B) increase; A C) decrease; B D) decrease; A