-In the Figure Above, the DLF Curve Is the Demand

question 50

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 a situation in which the government has a budget

• A) deficit of $1 trillion.
• B) surplus of $1 trillion.
• C) deficit of $0.5 trillion.
• D) deficit of $1.5 trillion.
• E) surplus of $0.5 trillion.