Multiple Choice
With no Ricardo-Barro effect, a government budget surplus
A) decreases the supply of loanable funds and lowers the real interest rate.
B) decreases the demand for loanable funds and increases the real interest rate.
C) increases the demand for loanable funds and lowers the real interest rate.
D) increases the supply of loanable funds and lowers the real interest rate.
E) increases the demand for loanable funds and raises the real interest rate.
Correct Answer:
Verified
Correct Answer:
Verified
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