The country of Epsilon has continuous strong economic growth and a steady price level. This situation is most likely the result of aggregate demand growing ________ aggregate supply.
A) at the same pace as long-run
B) slower than long-run
C) slower than short-run
D) faster than long-run
Question 2
If the government raises the tax on cigarettes, what is the effect on people's incentives and choices?
What will be an ideal response?