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Unformatted text preview: Trade deficit- increases Budget deficit- increases National deficit- increases FEDERAL RESERVE BANK (FED) Fed purchases government bonds in open market operation (Expansionary) AD line shifts to the right More money in the economy makes interest rates go down y- increase p- increase inf- increase u- decrease r- decrease i--decrease I- increase X- no effect M- increase TD- increase BD- decrease ND- decrease Clinton-Greenspan expansionary monetary policy, resulted in a budget surplus OPEC increases oil prices- y- decreases p- increases inf- increases u- increases r- increases i-increase I-decreases x- no change M- decrease TD- decrease BD- increase ND- increase...
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