Question

1. The government engages in more deficit spending. Ceteris paribus (all else equal), this would cause:

a. Both the demand and supply of loanable funds decrease.

b. The demand for loanable funds to increase.

c. Both the demand and supply of loanable funds to increase.

d. Economic institutions to collapse.

e. The supply of loanable funds to increase.

 

2. A technological advance leads to a shift in:

a. Neither short-run nor long-run aggregate supply.

b. Only short-run aggregate supply.

c. Both short-run and long-run aggregate supply.

d. Only aggregate demand.

e. Only long-run aggregate supply.