The federal government receives most of its revenue from personal income taxes and payroll taxes.

If the real interest rate rises,

A) the quantity of loanable funds demanded decreases. B) the demand for loanable funds curve shifts leftward. C) the demand for loanable funds curve shifts rightward. D) the quantity of loanable funds demanded increases. E) there is is movement down along the demand for loanable funds curve.

Based on price setting behavior, which of the following will cause a reduction in the price level?

A) an increase in productivity B) a reduction in the nominal wage C) a reduction in the markup D) all of the above E) none of the above