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.

If a perfectly competitive industry becomes a monopoly and the costs do not change, which of the following allocation of costs and benefits applies?

A) The producer benefits, but consumers and society are harmed. B) The producer and society are harmed, but consumers benefit. C) The producer and society benefit, but consumers are harmed. D) The producer is harmed, but consumers and society benefit. E) The producer, consumers, and society all benefit.

Say that initially the nominal interest rate is 6% and prices are stable, but the inflation rate the following year rises to 3%. If the real rate of interest is to remain unchanged, the nominal interest rate in the second year must:

a. rise by 9 percentage points. b. rise by 6 percentage points. c. rise by 3 percentage points. d. remain unchanged.