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

If foreigners spend more on U.S.-made goods and services than we spend on theirs

A) foreigners must borrow from the United States or sell U.S. assets to make up the difference. B) all U.S. national saving remains in the United States. C) we must borrow from foreigners because of low imports. D) funds flow in from abroad to help finance U.S. investment.

Which of the following statements is false?

A) The difference between average total cost and average fixed cost is average variable cost. B) The marginal cost curve intersects the average variable cost curve and the average total cost curve at their minimum points. C) Firms often refer to the process of lowering average fixed cost as "spreading the overhead." D) When marginal cost equals average total cost, average total cost is at its highest value.