Suppose the government's budget deficit increases by $500 billion. If there is no Ricardo-Barro effect, what occurs?
A) The supply of loanable funds curve shifts leftward, the real interest rate rises, and the quantity of loanable funds decreases.
B) The supply of loanable funds curve shifts rightward, the real interest rate falls, and the quantity of loanable funds increases.
C) The demand for loanable funds curve shifts rightward, the real interest rate rises, and the quantity of loanable funds increases.
D) The demand for loanable funds curve shifts leftward, the real interest rate falls, and the quantity of loanable funds decreases.
E) The supply of loanable funds curve shifts leftward, the real interest rate rises, and the quantity of loanable funds increases.
C
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If the price elasticity of supply is 0.75, it would imply that a _____
a. a 100 percent increase in price would increase the quantity supplied by 75 percent b. doubling of the price would increase the quantity supplied by 175 percent c. 50 percent increase in price would increase the quantity supplied by 25 percent d. 75 percent increase in price would increase the quantity supplied by 100 percent e. 120 percent increase in price would increase the quantity supplied by 90 percent
Bob purchases a book for $6, and his consumer surplus is $2 . How much is Bob willing to pay for the book?
a. $6. b. $2. c. $8. d. $4.