According to the Ricardo- Barro effect, government deficits
A) lead to a fall in the equilibrium real interest rate and an increase in investment.
B) lead to simultaneous decreases in private saving and decreases in the equilibrium real interest rate and investment.
C) lead to a rise in the equilibrium real interest rate, crowding out investment.
D) raise the real interest rate but have no effect on the nominal interest rate.
E) lead to simultaneous increases in private saving and have no effect on the equilibrium real interest rate and investment.
Correct Answer:
Verified
Q125: Refer to the table below to answer
Q126: Refer to the table below to answer
Q127: If the Ricardo- Barro effect occurs, _
Q128: According to the Ricardo- Barro effect,
A)financing government
Q129: Refer to the figure below to answer
Q131: A decrease in the government budget deficit
Q132: Choose the statement that is incorrect.
A)Most economists
Q133: In the market for loanable funds, a
Q134: Refer to the table below to answer
Q135: The Ricardo- Barro effect holds that
A)a government
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