Recall the Application about the price and supply of blueberries to answer the following question(s).According to the Application, as the quantity of blueberries demanded increases, prices ________ in the short run and ________ as supply catches up with demand.

If the average propensity to consume is initially 0.8, the marginal propensity to consume is 0.75, and real disposable income increases by $1000, the new value of saving is

A) $200. B) $250. C) $800. D) $750.

If the economy is experiencing an inflationary gap and the government wants to accelerate the adjustment to the long-run equilibrium, it should

A) reduce aggregate demand by cutting government spending or raising taxes. B) reduce aggregate demand by increasing government spending or cutting taxes. C) increase aggregate supply by cutting government spending or raising taxes. D) increase aggregate supply by increasing government spending or lowering taxes.