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

For the past decade, the unemployment rate in Western Europe has been higher than the unemployment rate in the United States

Based on this fact, is the natural unemployment rate larger in Western Europe or in the United States? Why might the natural rates differ between the two areas?

The demand for labor would most likely become less inelastic as a result of:

A. A decrease in the elasticity of the demand for the product that the labor produces B. A decrease in the time for employers to make technological changes or purchase new equipment C. A decrease in the proportion of labor costs to total costs D. An increase in the proportion of labor cost to total costs