Suppose the government has a budget surplus of $2 billion. If there is no Ricardo-Barro effect, what
Occurs?
A) The supply of loanable funds curve shifts leftward, lowering the interest rate, and increasing investment.
B) The supply of loanable funds curve shifts leftward, raising the interest rate, and decreasing investment.
C) The demand for loanable funds curve shifts rightward, raising the interest rate, and increasing investment.
D) The demand for loanable funds curve shifts leftward, lowering the interest rate, and decreasing investment.
E) The supply of loanable funds curve shifts rightward, lowering the interest rate, and increasing investment.
Correct Answer:
Verified
Q12: On January 1, Rick's Photo owned $50,000
Q13: The difference between the amount of capital
Q14: The demand for loanable funds
A)increases when wealth
Q15: Q16: For a government to add to the Q18: Financial capital Q19: The crowding-out effect is the tendency for Unlock this Answer For Free Now! View this answer and more for free by performing one of the following actions Scan the QR code to install the App and get 2 free unlocks Unlock quizzes for free by uploading documents
A)is accumulated investment.
B)depreciates each year.
C)is another
A)higher
