In the figure above, the DLF curve is the demand for loanable funds curve and the PDLF curve is the private demand for loanable funds curve

If there is no Ricardo-Barro effect, the figure shows the situation in which the government has a ________ so that the equilibrium real interest rate is ________ and the equilibrium quantity of investment is ________.
A) budget deficit; 6 percent; $1.5 trillion
B) balanced budget; 6 percent; $1.5 trillion
C) budget surplus; 4 percent; $1 trillion
D) budget surplus; 6 percent; $1.5 trillion
E) budget deficit; 4 percent; $1 trillion


A

Economics

You might also like to view...

Suppose a nation opens up to free trade and becomes an exporter of goods. Which of the following is then true?

A) The nation as a whole suffers losses. B) Sellers lose. C) Buyers lose. D) Buyers gain.

Economics

In the above figure, the short-run aggregate supply curve is SAS and the aggregate demand curve is AD. An inflationary gap exists

A) if the long-run aggregate supply curve is LAS1. B) if the long-run aggregate supply curve is LAS2. C) if the long-run aggregate supply curve is LAS3. D) All of the above answers are correct.

Economics

Which of the following statements about bank loans is correct?

a. Banks are allowed to make loans to businesses, individuals, but not make loans to other banks or invest in the stock market. b. Banks are allowed to make loans to businesses, individuals, and other banks, but not invest in the stock market. c. Banks are allowed to make loans to businesses, individuals, and invest in the stock market, but not make loans to other banks. d. Banks are allowed to make loans to businesses, individuals, other banks, and invest in the stock market.

Economics

The volume of U.S. debt in absolute terms was the highest during the period:

a. 1995–2000. b. 1945–1950. c. 2010–2014. d. 1975–1980.

Economics