The relationship between the AS-AD model and the Phillips curve ...

[Metfan725]

The relationship between the AS-AD model and the Phillips curve points out that as aggregate demand increases, the unemployment rate
 
  A) decreases and the price level falls.
  B) increases and the inflation rate rises.
  C) increases and the inflation rate falls.
  D) decreases and the inflation rate does not change, only the price level rises.
  E) decreases and the inflation rate rises.

Question 2

With no Ricardo-Barro effect, a government budget surplus
 
  A) decreases the demand for loanable funds and increases the real interest rate.
  B) increases the demand for loanable funds and lowers the real interest rate.
  C) increases the supply of loanable funds and lowers the real interest rate.
  D) increases the demand for loanable funds and raises the real interest rate.
  E) decreases the supply of loanable funds and lowers the real interest rate.

[gcook]

Answer to Question 1

E

Answer to Question 2

C

[Metfan725]

Excellent

[apple]

Gracias!