In the Figure Above, the DLF Curve Is the Demand

question 139

Multiple Choice

In the figure above, the DLF curve is the demand for loanable funds curve and the PDLF curve is the private demand for loanable funds curve.
- If there is no Ricardo-Barro effect, the figure shows the situation in which the government has a _{--------------------}so that the equilibrium real interest rate is_{--------------------}
and the equilibrium quantity of investment is_{--------------------} .

• A)budget deficit; 4 percent; $1 trillion
• B)budget deficit; 6 percent; $1.5 trillion
• C)balanced budget; 6 percent; $1.5 trillion
• D)budget surplus; 6 percent; $1.5 trillion
• E)budget surplus; 4 percent; $1 trillion

---

Definitions:

Price Charged

The amount of money demanded or set as payment for the sale of a good or service.

Hardware Stores

Retail businesses specializing in selling tools, building materials, and home improvement products.

Tools

Instruments or software used to perform tasks or functions, especially in the context of technical or specialized processes.

Independent Populations

Two or more populations that do not affect each other, such that measurements from one population are not related to measurements from the others.