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

It is estimated that in 2007, Mexico had a population of 110 million and Brazil had a population of 190 million. At the same time, Mexico's GDP was $1 trillion while Brazil's was $1.31 trillion. These data show that

A) Brazil had a healthier economy than did Mexico. B) Mexico's GDP per person was lower than was Brazil's GDP per person in 2007. C) Mexico's GDP per person was $9090 in 2007. D) Brazil's GDP per person was $5300 in 2007.

How will an increase in the government budget surplus as a result of lower government spending (with no change in net taxes) affect private saving in the economy?

A) Private saving will increase by the amount of increase in the budget surplus. B) Private saving will be unaffected by the increase in the budget surplus. C) Private saving will decrease by less than the amount of increase in the budget surplus. D) Private saving will decrease by the amount of increase in the budget surplus.