In the Classical Model,beginning from an Equilibrium in Which the Government

Multiple Choice

In the classical model,beginning from an equilibrium in which the government is running a budget surplus

A) the supply of loanable funds will be horizontal
B) an increase in government spending will cause the interest rate to rise
C) the supply of loanable funds will be vertical
D) an increase in government spending will crowd out less than an equal amount of private spending
E) a decrease in government spending will crowd out less than an equal amount of private spending