In the Figure Above, the DLF Curve Is the Demand

Multiple Choice

In the figure above, 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_{--------------------}
and the equilibrium quantity of investment is_{--------------------} .

A) budget deficit; 4 percent; $1 trillion
B) budget deficit; 6 percent; $1.5 trillion
C) balanced budget; 6 percent; $1.5 trillion
D) budget surplus; 6 percent; $1.5 trillion
E) budget surplus; 4 percent; $1 trillion