Which of the following would be but best item for the local government to tax if its goal was to raise revenue?

Using the aggregate expenditure-output model, assume the aggregate expenditures (AE) line is below the 45-degree line at full-employment GDP. This vertical distance is called a(n):

a. inflationary gap. b. recessionary gap. c. negative GDP gap. d. marginal propensity to consume gap.

Which of the following best describes the history of the U.S. price level from 1970 to 2008?

a. The price level increased during the 1970s and 1980s, but decreased during the 1990s. b. The price level increased during the 1970s but decreased during the 1980s and 1990s. c. The price level decreased over the whole period. d. The price level increased over the whole period. e. The price level increased during the 1970s but decreased during the 1980s, and 1990s.