Multiple Choice
The Ricardo-Barro effect holds that
A) a government budget deficit induces a decrease in saving that magnifies the crowding out effect.
B) government budget deficits have no effect on the real interest rate.
C) equal increases in taxes and government expenditures have no effect on equilibrium real GDP.
D) a government budget deficit crowds out private investment.
Correct Answer:
Verified
Correct Answer:
Verified
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