France's government is running a budget deficit. With no Ricardo-Barro effect, which of the following events will occur?
I. The supply curve of loanable funds will shift leftward.
II. A higher real interest rate crowds out investment.
III. Saving increases.
A) I and II
B) II and III
C) I only
D) III only
Correct Answer:
Verified
Q159: Q160: Suppose that expected profit decreases. This change Q161: The idea that a government budget deficit Q162: The crowding-out effect refers to Q163: A decrease in disposable income shifts the Q165: If the government has a budget deficit, Q166: The term "crowding out" relates to the Q167: If the government's budget deficit increases and Q168: According to the Ricardo-Barro effect Q169: According to the Ricardo-Barro effect
A) government spending
A)
A) the government
A) government deficits
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