The Ricardo-Barro effect implies that a budget deficit will not raise interest rates or reduce investment.

Name: The Ricardo-Barro effect implies that a budget deficit will not raise interest rates or reduce investment.
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The Ricardo-Barro effect, also known as Ricardian equivalence, suggests that consumers anticipate future taxes to pay off government debt, so they save more, offsetting the impact of a budget deficit on interest rates and investment.

The Ricardo-Barro Effect Implies That a Budget Deficit Will Not