To graphically demonstrate the principle of increasing marginal opportunity cost, the production possibility curve must be:

The finance of government spending through a Treasury sale of bonds which are then purchased by the Fed

A) causes both reserves and the monetary base to rise. B) causes both reserves and the monetary base to decline. C) causes reserves to rise, but the monetary base to decline. D) has no net effect on the monetary base.

Government programs that automatically shift the government budget toward a deficit during recessions and a surplus during recoveries are called

a. discretionary fiscal policy. b. automatic stabilizers. c. progressive taxation. d. price deflators.