If the Ricardo-Barro Effect Occurs, a Government Budget Deficit Raises

Multiple Choice

If the Ricardo-Barro effect occurs, a government budget deficit raises the equilibrium real interest rate by ________ and decreases the equilibrium quantity of investment by ________ if the Ricardo-Barro effect is absent.

A) more; more than
B) more; less than
C) less; more than
D) less; less than
E) the same amount; the same amount as