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.

Suppose the cost curves in the above figure apply to all firms in the market. Then, if the initial price is P1, in the long run the market

A) demand will increase. B) demand will decrease. C) supply will increase. D) supply will decrease.

Research in history and economic history shows that before 1880,

(a) there was some government intervention in the private sector of the American economy. (b) there was substantial federal regulation of private business organization but little influence in the economy otherwise. (c) the regulation and participation that existed were usually of a background nature and were not concerned with the details of day-to-day private business. (d) laissez faire was the rule so far as the federal government was concerned.