6. Which of the following is an example of expansionary fiscal policy? a. an increase in income taxes b. deficit reduction c. an increase in government spending on the interstate highway system d. an increase in the money supply e. a decrease in the target for the federal funds rate 7. In the fixed-price Keynesian model, which of the following will lead to the largest increase in real GDP? a an increase in taxes of $100. b. a decrease in taxes of $100. c. an increase in import spending of $100. d. a decrease in government spending of $100. c. an increase in government spending of $100. 8. Which of the following statements is false? a. Saving is equal to zero when the consumption function crosses the 45-degree line. b. Crowding out occurs in the fixed-price Keynesian model. c. In the new-Keynesian model the aggregate supply curve has three ranges depending on how far the economy is from full employment. d. In the neo-classical model there are both short-run and long-run aggregate supply curves. c. If the aggregate supply curve is the ordinary upward-sloping aggregate supply, then an increase in aggregate demand will increase both the price level and real GDP. 9. Which of the following is a function of money? a. Money acts as a store of value. b. Money provides intrinsic value to the user. c. Money increases the transactions costs of exchange. d. Money requires a double coincidence of wants. e. all of the above. 10. The group that meets approximately every six weeks (or eight times per year) to determine the appropriate stance of monetary policy is known as a the Bureau of Labor Statistics. b. the Federal Reserve Bank. c. the Bureau of Economic Analysis. d. the Federal Open Market Committee. e. the Board of Supervisors