According to the Ricardo-Barro effect, government deficits
A) lead to a rise in the equilibrium real interest rate, crowding out investment.
B) lead to simultaneous increases in private saving and no effect on the equilibrium real interest rate and investment.
C) lead to simultaneous decreases in private saving and decreases in the equilibrium real interest rate and investment.
D) lead to a fall in the equilibrium real interest rate and a rise in investment.
B
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If one-time gains from defection are always less than the discounted present value of an infinite time stream of cooperative payoffs at some given discount rate, the decision-makers have escaped
a. the Folk Theorem b. the law of large numbers c. the Prisoner's dilemma d. the paradox of large numbers e. the strategy of recusal
The consumption function shows the relationship between consumption and
a. interest rates b. saving c. price level changes d. GDP e. income
If the full-employment level of Macroland's aggregate economy is $1,600 billion and its economy is currently in an equilibrium at $2,100 billion, then Macroland
a. has a recessionary gap b. needs an expansion in aggregate expenditures c. needs a reduction in aggregate supply d. has an inflationary gap e. needs an aggregate demand expansion
When looking at this graph for the welfare effects of a price ceiling, the loss to producers created by the price ceiling is ______.
a. area d + e
b. everything below the supply curve
c. everything above the demand curve
d. area c + e