The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 

If the government taxes an industry that creates pollution, the tax

i. decreases the pollution. ii. increases the price of the product produced by the firms. iii. decreases the quantity of the good produced. A) i only. B) ii only. C) ii and iii. D) i and iii. E) i, ii, and iii.

In the market for jeans, which of the following events increases the de-mand for a pair of jeans?

A. The wage rate paid to garment workers rises. B. The price of a denim skirt (a substitute for jeans) rises. C. The price of denim cloth falls. D. New technology reduces the time it takes to make a pair of jeans.