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

When the Fed conducts an open market sale, it leads to a higher level of investment and output in the economy

Indicate whether the statement is true or false

If the elasticity of demand is -2.3 when calculated using the point elasticity method and -3.4 using the arc elasticity method, then

A) you should use the point elasticity. B) it is OK to use either one. C) there must be a mistake in the calculations. D) you should use the arc elasticity.