The Ricardo-Barro Effect Holds That

The Ricardo-Barro effect holds that

A) equal increases in taxes and government expenditures have no effect on equilibrium real GDP.
B) a government budget deficit has no effect on the real interest rate.
C) a government budget deficit crowds out private investment.
D) a government budget deficit induces a decrease in saving that magnifies the crowding out effect.
E) a government budget deficit increases the real interest rate.