A higher interest rate makes _____ more attractive. Therefore the quantity of loanable funds supplied increases

The aggregate supply curve normally

a. slopes downward and to the right due to higher resource prices. b. has a horizontal slope equal to zero. c. is very steep in the lower portion and flatter in the upper portion. d. slopes upward to the right due to short-run fixed costs of production.

Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and real GDP in the context of the Three-Sector-Model?

a. The quantity of real loanable funds per time period falls, and real GDP falls. b. The quantity of real loanable funds per time period rises, and real GDP rises. c. The quantity of real loanable funds per time period rises, and real GDP remains the same. d. The quantity of real loanable funds per time period and real GDP remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.