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If There Is No Ricardo-Barro Effect, a Government Budget Surplus

Question 221

Multiple Choice

If there is no Ricardo-Barro effect, a government budget surplus ________ the total supply of loanable funds and ________ the real interest rate.


A) increases; raises
B) increases; lowers
C) decreases; raises
D) decreases; lowers
E) does not change; does not change

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