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

When prices do not change very much, the income-expenditure model can be used to understand economic fluctuation in the

A) long run. B) fiscal year. C) short run. D) federal budget allocation.

Refer to Figure 9.2. A movement from point c to point b could be caused by a simultaneous ________ and ________

A) decrease in government spending; decrease in the price of oil B) increase in government spending; increase in the money supply C) increase in taxes; decrease in government spending D) decrease in taxes; increase in the price of oil