Monetary policy involves the use of federal government spending to change the money supply.

The marginal cost of an activity ________ as you do more of it

A) increases B) decreases C) doesn't change D) changes only if the marginal benefit of the activity does not change E) changes only if the marginal benefit of the activity changes

The relation S + (T - G) = I + NX describing the equilibrium of an economy explicitly demonstrates

A) deficit spending by the government reduces either investment and/or net foreign investment. B) deficit spending reduces private saving (assuming net foreign investment remains unchanged). C) as private saving increases net foreign investment must decrease, exports decline. D) as private saving increases the deficit must decline if investment decreases.