According to Figure 12.1, if the economy moves from point C to point A because of increased government spending, the amount of private spending crowded out is equal to the distance

Checking account deposits are counted in M1, but savings account deposits are not because

A) checking deposits can be used for payment; cash in savings cannot. B) checking deposits are a form of consumption; savings deposits are a form of investments. C) Trick question! Neither type is counted in M1. D) Trick question! Both deposit types are counted in M1.

The automatic mechanism can best be described as:

A) the process of the economy adjusting back to potential GDP without any action taken by the government B) the result of monetary policy implemented by the Fed restoring full employment C) how fiscal policy is used to return the economy to its potential D) using rule-based policies to stabilize the economy