With the single exception of changes in the capital gains tax rate, expansionary fiscal policy typically leads the real interest rate to ____, because it leads an existing government budget deficit to ____.

Expansionary fiscal policy that is implemented to prevent real GDP from falling below potential GDP will likely result in a ______ inflation rate and a _____ level of Real GDP.

Suppose that Jose withdraws $45 from his mom’s checking account at the Bank of Tampa. He keeps $15 in cash and deposits the rest in his own savings account at Bank of America. Which of the following has occurred?

Suppose that Ford is an American company, and that Volkswagen is a German company. Which of the following would count in the American GNP, but not in the American GDP?

Suppose that the Federal Reserve decides to conduct “extraordinary” open-market purchases. This leads the Federal Funds Rate to _____, and commercial banks should respond by ____ lending.

Reducing the Labor Income Tax leads to a(n) ____ in employment, and is considered ____ fiscal policy.

Which of the following functions do commercial banks NOT perform?

Real GDP Government Receipts Government Outlays $ 3 trillion $0.3 trillion $1.3 trillion $ 4 trillion $0.6 trillion $1.1 trillion $ 5 trillion $0.9 trillion $0.9 trillion $ 6 trillion $1.2 trillion $0.7 trillion $ 7 trillion $1.5 trillion $0.5 trillion The government experiences a “balanced budget” when Real GDP equals _____.

Which of the following is not one of the monetary policy tools of the Federal Reserve?

Reducing the Labor Income Tax leads to a(n) ____ in employment, and is considered ____.