If the economy moves upward along its short-run Phillips curve, ...

[littleanan]

If the economy moves upward along its short-run Phillips curve, in the AS-AD diagram, this movement is shown by a
 
  A) rightward shift of the AS curve and a movement along the AD curve.
  B) movement downward along the AS curve as a result of a leftward shift of the AD curve.
  C) movement upward along the AS curve as a result of a rightward shift of the AD curve.
  D) leftward shift of the AS curve and a movement along the AD curve.
  E) rightward shift of potential GDP.

Question 2

If there is no Ricardo-Barro effect, a government budget surplus ________ the total supply of loanable funds and ________ the real interest rate.
 
  A) does not change; does not change
  B) increases; raises
  C) increases; lowers
  D) decreases; lowers
  E) decreases; raises

[GCabra]

Answer to Question 1

C

Answer to Question 2

C