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.

Assume that GDP = $10,000 and the MPC = 0.75. If policy makers want to increase GDP by 30 percent, by how much should they increase government spending?

A) $300 B) $750 C) $1,000 D) $3,000

In which of the following ways do advertising and other selling costs affect a firm's cost curves?

i. Advertising expenditures increase total fixed costs. ii. Selling costs increase total fixed costs. iii. Advertising and other selling costs per unit of output decrease as output increases. A) i only B) i and ii C) iii only D) i and iii E) i, ii, and iii