Use the following data to work Problem. The data is for an economy when the government's budget is balanced. 11eb8296_4552_5147_8eeb_5107657db00b_SM2864_00 If the government's budget becomes a deficit of $1 trillion and the Ricardo-Barro effect occurs, what are the real interest rate and the investment?

Macroeconomics 11th Edition by Michael Parkin

Edition 11ISBN: 9780133423884

Edition 11ISBN: 9780133423884

Exercise 16

Use the following data to work Problem. The data is for an economy when the government's budget is balanced.

If the government's budget becomes a deficit of $1 trillion and the Ricardo-Barro effect occurs, what are the real interest rate and the investment?

Explanation

Verified

The Richardo-Barro effect says that the ...