Suppose the government's budget deficit increases by $500 billion. If there is no Ricardo-Barro effect, what occurs?
A) The supply of loanable funds curve shifts leftward, the real interest rate rises, and the quantity of loanable funds decreases.
B) The supply of loanable funds curve shifts rightward, the real interest rate falls, and the quantity of loanable funds increases.
C) The demand for loanable funds curve shifts rightward, the real interest rate rises, and the quantity of loanable funds increases.
D) The demand for loanable funds curve shifts leftward, the real interest rate falls, and the quantity of loanable funds decreases.
E) The supply of loanable funds curve shifts leftward, the real interest rate rises, and the quantity of loanable funds increases.
C
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Common ownership of resources such as land can be efficient as long as
a. people are honest b. government regulates resource use c. rules for resource use are clear in assigning rights and responsibilities d. penalties for misuse are severe e. all the above are required
A concentration ratio provides a better assessment of market power than the Herfindahl-Hirschman index does.
Answer the following statement true (T) or false (F)
Which of the following is associated with a contractionary monetary policy?
A. lowering the required reserve ratio B. raising bond prices C. selling bonds D. lowering the differential between the discount rate and the federal funds rate
According to the Law of Demand, the demand curve for a good will
A) shift leftward when the price of the good increases. B) shift rightward when the price of the good increases. C) slope downward. D) slope upward.