Suppose the government has a budget deficit of $2 billion.If there is no Ricardo-Barro effect, how much crowding out of investment occurs?
A) more than $2 billion
B) some crowding out occurs, but less than $2 billion
C) exactly equal to $2 billion dollars
D) no crowding out occurs and investment does not change
E) no crowding out occurs because investment increases
Correct Answer:
Verified
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A)
