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.

The long-run aggregate supply curve

A) is horizontal. B) has a steep but positive slope. C) has a negative slope. D) is vertical.

According to the Laffer curve, we know with certainty that an increase in the tax rate will

A) cause tax revenue to increase. B) cause tax revenue to decrease. C) have no effect on tax revenue. D) cause tax revenue to increase, decrease, or remain unchanged.