If aggregate demand decreases, the A) short-run Phillips curve ...

[dbose]

If aggregate demand decreases, the
 
  A) short-run Phillips curve shifts rightward.
  B) economy moves to a higher inflation rate along its short-run Phillips curve.
  C) short-run Phillips curve does not shift nor is there a movement along it.
  D) short-run Phillips curve shifts leftward.
  E) economy moves to a lower inflation rate along its short-run Phillips curve.

Question 2

If there is no Ricardo-Barro effect, a government budget surplus
 
  A) increases the demand for loanable funds.
  B) increases the supply of loanable funds.
  C) decreases the supply of loanable funds.
  D) decreases the demand loanable funds.
  E) has no effect on the demand for loanable funds, the supply of loanable funds, or the real interest rate.

[jsm54321]

Answer to Question 1

E

Answer to Question 2

B