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
