When the aggregate demand curve shifts rightward, the price level ...

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When the aggregate demand curve shifts rightward, the price level ________ and the unemployment rate ________.
 
  A) decreases; increases
  B) decreases; decreases
  C) increases; decreases
  D) does not change; does not change
  E) increases; increases

Question 2

If there is no Ricardo-Barro effect, the government
 
  A) only affects the demand for loanable funds curve in the loanable funds market.
  B) has no effect because private saving changes to offset the effect that the government's budget deficit or surplus might otherwise have.
  C) plays no direct role in the loanable funds market because it doesn't affect either the demand for loanable funds or the supply of loanable funds.
  D) increases the supply of loanable funds if it has a budget surplus and shifts the supply of loanable funds curve.
  E) always has negative saving and therefore lowers the real interest rate.

[Jadwiga9]

Answer to Question 1

C

Answer to Question 2

D

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