The tax interaction effect is the _________ in excess burden in the labor market stemming from the _______ in real wages caused by a Pigouvian tax.

At prices above the equilibrium price, what occurs?

What will be an ideal response?

Inflation tends to ________ during the expansion phase of the business cycle and ________ during the recession phase of the business cycle

A) decrease; decrease further B) increase; increase further C) increase; decrease D) decrease; increase