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If the Ricardo-Barro Effect Is Present, a Government Budget Deficit

Question 44

Multiple Choice

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


A) more; more
B) more; less
C) less; more
D) less; less

Correct Answer:

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