According to the Ricardo-Barro Effect, an Increase in the Government

Multiple Choice

According to the Ricardo-Barro effect, an increase in the government budget deficit

A) shifts the supply of loanable funds curve leftward.
B) shifts the demand for loanable funds curve leftward.
C) lowers the real interest rate.
D) does not change the real interest rate.
E) has no effect on the nominal interest rate but does change the real interest rate.