If the government begins to run a larger budget deficit, the demand for loanable funds _______ and the real interest rate _______.
A) increases; rises
B) decreases; rises
C) increases; falls
D) decreases; falls
E) increases; rises or falls depending on the change in the supply of loanable funds
Correct Answer:
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Q108: According to the Ricardo- Barro effect,
A)a government
Q109: The Ricardo- Barro effect of a government
Q110: The tendency for private saving to increase
Q111: Which of the following explains why the
Q112: When government saving is negative,
A)the real interest
Q114: A government budget deficit _ the demand
Q115: The crowding- out effect refers to
A)a government
Q116: A government budget deficit _ the demand
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