From 2001 to 2005 there was a dramatic change in the price of houses. This change made people feel wealthier and shifted aggregate demand curve to the right. The price of houses must have

Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and real GDP in the context of the Three-Sector-Model?

a. The quantity of real loanable funds per time period rises, and real GDP rises. b. The quantity of real loanable funds per time period rises, and real GDP remains the same. c. The quantity of real loanable funds per time period and real GDP remain the same. d. The quantity of real loanable funds per time period rises, and real GDP falls. e. The quantity of real loanable funds per time period falls, and real GDP falls.

Refer to the above figure. A shortage will exist when

A. quantity demanded equals 3. B. the price equals $10. C. the price equals $6. D. the price is between $0 and $6.