If there is no Ricardo-Barro effect, a government budget surplus ________ the supply of loanable funds and ________ equilibrium investment.

Name: If there is no Ricardo-Barro effect, a government budget surplus ________ the supply of loanable funds and ________ equilibrium investment.
Brand: Quizplus
Rating: 4.8 (46 reviews)

Question

Quizplus · Accepted Answer

Without the Ricardo-Barro effect, a government budget surplus increases the supply of loanable funds, which typically leads to a decrease in interest rates and an increase in equilibrium investment.

If There Is No Ricardo-Barro Effect, a Government Budget Surplus