Figure 33-8
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In Figure 33-8, which of the following points cannot be observed in the long run?

In the figure above, the shift in the supply of loanable funds curve from SLF1 to SLF2 could be the result of

A) an increase in expected rate of profit. B) a decrease in disposable income. C) an increase in expected future disposable income. D) an increase in the real interest rate. E) a decrease in wealth

The Ricardo-Barro effect holds that

A) equal increases in taxes and government expenditures have no effect on equilibrium real GDP. B) government budget deficits have no effect on the real interest rate. C) a government budget deficit crowds out private investment. D) a government budget deficit induces a decrease in saving that magnifies the crowding out effect.