If the government runs a budget deficit to fight a war and there is no Ricardo-Barro effect, what is an impact of the deficit?
A) The quantity of investment increases.
B) The real interest rate rises.
C) Firms purchase more capital equipment.
D) Animal spirits or irrational exuberance is created.
E) The quantity of private saving decreases.
B
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When ________ changes, the supply of loanable funds curve shifts
A) the price level B) "animal spirits" C) people's expected future income D) the expected rate of profit E) investment
If the demand and supply curves for a commodity both shift to the left and the shift in demand is less than the shift in supply, then in comparison to the initial equilibrium, the new equilibrium will be characterized by:
A) the same price and quantity. B) a higher price and quantity. C) a higher price and a lower quantity. D) a lower price and a higher quantity.