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If There Is No Ricardo-Barro Effect, an Increase in the Government

Question 17

Multiple Choice

If there is no Ricardo-Barro effect, an increase in the government budget deficit


A) raises the equilibrium real interest rate.
B) lowers the equilibrium real interest rate.
C) decreases the demand for loanable funds.
D) decreases the supply of loanable funds.
E) increases the supply of loanable funds.

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