The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________.  

Taxes constant

What will be an ideal response?

Economic decision making recognizes that

A) all choices have benefits and costs. B) benefits are largely free while costs are not. C) costs are controllable but benefits are not measurable. D) prices do not reflect all information known to managers. E) resources and wants are limited.