In the aggregate demand-aggregate supply model, the economy's price level is assumed to be:
A. Constant, just like in the aggregate expenditures model
B. Variable, just like in the aggregate expenditures model
C. Constant, unlike in the aggregate expenditures model
D. Variable, unlike in the aggregate expenditures model
D. Variable, unlike in the aggregate expenditures model
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If the government runs a budget deficit, then
A) national saving is negative. B) household but not business saving must pay for the deficit. C) part of household and business saving finances the deficit. D) national saving cannot fund investment.
A government budget deficit will lead to:
a. an increase in the supply of loanable funds and an increase in real interest rates. b. a decrease in the supply of loanable funds and an increase in real interest rates. c. an increase in the supply of loanable funds and a decrease in real interest rates. d. a decrease in the supply of loanable funds and a decrease in real interest rates.