If an economy is at equilibrium, it will also be operating at full employment

When price equals marginal cost

A) firms make zero profits. B) firms make positive profits. C) the industry is in long-run equilibrium. D) the marginal benefits of consuming an extra unit of the good exactly equals the marginal cost to society of producing the good.

Assume the economy is operating below full employment. Which of the following policy actions will allow aggregate spending to increase but will not increase the size of the government in the process?

A. Increase government spending and leave tax rates unchanged. B. Decrease government spending by more than an increase in taxes. C. Decrease tax rates and leave government spending unchanged. D. Increase government spending and taxes by the same amount.