Refer to the diagrams, in which AD 1 and AS 1 are the "before" curves and AD 2 and AS 2 are the "after" curves. Other things equal, a decline in net exports caused by the foreign purchases effect of a price-level increase is depicted by the:

If a bank's deposits at the Fed increase by $10 million, then

A) both the bank's liabilities and the Fed's liabilities increase by $10 million. B) the bank's assets increase by $10 million, but there is no change at the Fed since it does not really have assets or liabilities. C) the bank's assets increase by $10 million and the Fed's liabilities increase by $10 million. D) both the bank's assets and the Fed's assets increase by $10 million.

Over the past half-century, government transfer payments have increased. As a result ________

A) interest payments on government debt have declined B) government expenditures have become a larger portion of GDP C) the volatility of investment expenditures has declined D) net exports have been positive in most years E) none of the above