In the figure, the DLF curve is the demand for loanable funds curve and the PDLF curve is the private demand for loanable funds curve. If there is no Ricardo-Barro effect, the figure shows the situation in which the government has a so that the equilibrium real interest rate is equilibrium quantity of investment is Real interest rate (percent per year) 12- 10- and the SLF 8- O A. budget deficit; 6 percent; $1.5 trillion O B. budget deficit; 4 percent; $1 trillion 6- OC. budget surplus; 6 percent; $1.5 trillion O D. budget surplus; 4 percent; $1 trillion 4- O E. balanced budget; 6 percent; $1.5 trillion 2- DLF PDLF 0.5 1.0 1.5 2.0 2.5 3.0 Loanable funds (trillions of 2012 dollars)

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Economics
In the figure, the DLF curve is the demand for loanable funds
curve and the PDLF curve is the private demand for loanable
funds curve. If there is no Ricardo-Barro effect, the figure
Real interest rate (percent per year)
12-
shows the situation in which the government has a
so that the equilibrium real interest rate is
equilibrium quantity of investment is
10-
and the
SLF
8-
O A. budget deficit; 6 percent; $1.5 trillion
B. budget deficit; 4 percent; $1 trillion
6-
OC. budget surplus; 6 percent; $1.5 trillion
D. budget surplus; 4 percent; $1 trillion
E. balanced budget; 6 percent; $1.5 trillion
2-
DLF
PDLF
0-
2.0
Loanable funds (trillions of 2012 dollars)
0.5
1.0
1.5
2.5
3.0
O O
O O O
Transcribed Image Text:Economics In the figure, the DLF curve is the demand for loanable funds curve and the PDLF curve is the private demand for loanable funds curve. If there is no Ricardo-Barro effect, the figure Real interest rate (percent per year) 12- shows the situation in which the government has a so that the equilibrium real interest rate is equilibrium quantity of investment is 10- and the SLF 8- O A. budget deficit; 6 percent; $1.5 trillion B. budget deficit; 4 percent; $1 trillion 6- OC. budget surplus; 6 percent; $1.5 trillion D. budget surplus; 4 percent; $1 trillion E. balanced budget; 6 percent; $1.5 trillion 2- DLF PDLF 0- 2.0 Loanable funds (trillions of 2012 dollars) 0.5 1.0 1.5 2.5 3.0 O O O O O
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