Liabilities of the commercial banking system include:

In the above figure, the inflationary gap when AD2 is the aggregate demand curve equals

A) the difference between 110 and 100. B) the difference between $16.5 trillion and $16.0 trillion. C) LAS minus SAS at a price level of 100. D) AD1.

When the government's spending is less than tax revenue, it implies that:

a. the government budget is balanced. b. the government is running a deficit. c. there is a budget surplus. d. there is a higher chance of default by the government. e. the government needs to borrow from the central bank.