According to the Ricardo- Barro effect, government budget deficits
A) lead to simultaneous increases in private saving and no effect on the equilibrium real interest rate and investment.
B) lead to a rise in the equilibrium real interest rate, crowding- out investment.
C) lead to simultaneous decreases in private saving and decreases in the equilibrium real interest rate and investment.
D) lead to a fall in the equilibrium real interest rate and a rise in investment.
Correct Answer:
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Q1: Q2: Approximately, the real interest rate _ the Q3: The supply of loanable funds is the Q4: A rise in the real interest rate Q6: In January 2010, Tim owned machines valued Q7: Suppose the real interest rate rises and Q8: Gross investment Q9: National saving is defined as the amount Q10: A nation's investment must be financed by Q51: People expect an inflation rate of 5
A)shifts
A)includes only replacement investment.
B)is the purchase
A)national
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