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

A movement down along a given isoquant causes the marginal rate of technical substitution to:

A) increase. B) stay the same. C) decrease. D) cannot be determined without additional information.

If the proportion of GDP that people choose to hold in the form of money balances is 0.25, then a $100 increase in the money supply will lead to a rightward shift in the LM curve in the amount of

A) $400. B) $ 25. C) $ 75. D) $100.