The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 

As long as there are fixed resources, diminishing marginal returns will never exist

a. True b. False Indicate whether the statement is true or false

When the slope of a country's production set declines, it implies:

a. the production set has shrunk. b. the marginal cost of producing the good measured on the Y-axis has fallen. c. the marginal cost of producing the good measured on the Y-axis has increased. d. the marginal cost of producing the good measured on the X-axis has fallen.