The Ricardo-Barro Effect Argues That the Crowding-Out Effect

Multiple Choice

The Ricardo-Barro effect argues that the crowding-out effect

A) is the result of a government budget surplus and higher interest rates.
B) will not occur, because the private saving supply will change to offset any change in the government budget deficit.
C) is the result of the government budget deficit and higher interest rates.
D) will occur, because the private saving supply will change to offset any change in the government budget deficit.
E) is stronger when the government runs a budget surplus than when it runs a budget deficit.