Suppose the government's budget deficit increases by $500 billion. If there is no Ricardo-Barro effect, what occurs?
A) The supply of loanable funds curve shifts rightward, the real interest rate falls, and the quantity of loanable funds increases.
B) The supply of loanable funds curve shifts leftward, the real interest rate rises, and the quantity of loanable funds increases.
C) The supply of loanable funds curve shifts leftward, the real interest rate rises, and the quantity of loanable funds decreases.
D) The demand for loanable funds curve shifts rightward, the real interest rate rises, and the quantity of loanable funds increases.
E) The demand for loanable funds curve shifts leftward, the real interest rate falls, and the quantity of loanable funds decreases.
Correct Answer:
Verified
Q48: Net investment is
A)the same as depreciation.
B)gross investment
Q49: U.S. capital at the end of 2012
Q50: Q51: Bill's Lawn service starts the year with Q52: Other things remaining the same, the ----------------------------------------the Q54: Lulu purchased a security that promises to Q55: If there is no Ricardo-Barro effect, an Q56: --------------------increases the quantity of capital and--------------------decreases the Q57: A document that promises to pay specified Q58: Economists use the word "capital" to mean
A)the
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