With Is No Ricardo-Barro Effect, a Government Budget Surplus ________

Multiple Choice

With is no Ricardo-Barro effect, a government budget surplus ________ the real interest rate because the ________ loanable funds increases.

A) raises; demand for
B) lowers; demand for
C) raises; supply of
D) lowers; supply of
E) None of the above answers are correct because the real interest rate does not change.