Multiple Choice
According to the Ricardo-Barro effect, government deficits
A) lead to a rise in the equilibrium real interest rate, crowding out investment.
B) lead to simultaneous increases in private saving and no effect on the equilibrium real interest rate and investment.
C) lead to simultaneous decreases in private saving and decreases in the equilibrium real interest rate and investment.
D) lead to a fall in the equilibrium real interest rate and a rise in investment.
Correct Answer:
Verified
Correct Answer:
Verified
Q197: The nominal interest rate minus the real
Q198: In January, suppose that a share of
Q199: Suppose the real interest rate rises and
Q200: If the government has a budget deficit,
Q201: During the financial crisis in 2007 and
Q203: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB8586/.jpg" alt=" -In the above
Q204: The nominal interest rate approximately equals which
Q205: National saving equals<br>A) household saving + business
Q206: The Ricardo-Barro effect asserts that<br>A) government saving
Q207: A decrease in the demand for loanable