The difference between GDP and final sales equals

If a reduction in government borrowing leads to lower real interest rates in the United States,

a. U.S. investors will decrease their investments abroad. b. U.S. exports will decrease relative to imports. c. the inflow of loanable funds from abroad will moderate the fall in the real rate of interest. d. the dollar will depreciate in the foreign exchange market.

In a fractional reserve banking system:

A. bank panics cannot occur. B. the monetary system must be backed by gold. C. banks can create money through the lending process. D. the Federal Reserve has no control over the amount of money in circulation.