With no Ricardo-Barro effect, a government budget surplus
A) decreases the demand for loanable funds and increases the real interest rate.
B) increases the demand for loanable funds and lowers the real interest rate.
C) increases the supply of loanable funds and lowers the real interest rate.
D) increases the demand for loanable funds and raises the real interest rate.
E) decreases the supply of loanable funds and lowers the real interest rate.
C
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If actual output exceeds potential output, the short-run aggregate supply curve shifts downward over time
Indicate whether the statement is true or false
In 1960, spending on income transfers and health care accounted for 21.5 percent of the federal budget. In 2012, these two items accounted for
a. less than 15 percent of the federal budget. b. approximately 25 percent of the federal budget. c. approximately 37 percent of the federal budget. d. approximately 57 percent of the federal budget.