Franceʹs Government Is Running a Budget Deficit

question 190

Multiple Choice

Franceʹs government is running a budget deficit. With no Ricardo-Barro effect, which of the following events will occur?
i. The supply curve of loanable funds will shift leftward.
ii. A higher real interest rate crowds out investment.
iii. Saving increases.

• A) i only.
• B) ii and iii.
• C) iii only.
• D) i and ii.

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