When real GDP is greater than potential GDP, there is ________ ...

[Ebrown]

When real GDP is greater than potential GDP, there is ________ which leads the inflation rate to ________.
 
  A) a recessionary gap; rise
  B) a recessionary gap; remain stable
  C) an inflationary gap; rise
  D) a recessionary gap; fall
  E) an inflationary gap; fall

Question 2

If the real interest rate falls, there is
 
  A) a leftward shift of the supply of loanable funds curve and no shift in the demand for loanable funds curve.
  B) an upward movement along the supply of loanable funds curve.
  C) a downward movement along the supply of loanable funds curve.
  D) a rightward shift of the supply curve of loanable funds and no shift in the demand for loanable funds curve.
  E) a leftward shift of the supply of loanable funds curve and a rightward shift in the demand for loanable funds curve.

[nathang24]

Answer to Question 1

C

Answer to Question 2

C

[Ebrown]

Excellent

[epscape]

Great answer, keep it coming