Choose the Statement That Is Incorrect

question 14

Multiple Choice

Choose the statement that is incorrect.

• A)Most economists believe that the Ricardo- Barro effect holds in the market for loanable funds.
• B)According to the Ricardo- Barro effect, the quantity of loanable funds demanded increases when a government budget deficit occurs, and private saving and the private supply of loanable funds increase to match the quantity of loanable funds demanded.
• C)The Ricardo- Barro effect does hold that a government budget deficit produces a crowding- out effect.
• D)According to the Ricardo- Barro effect, taxpayers are rational people who know that a budget deficit today means that future taxes will be higher and future disposable incomes will be smaller.
• E)According to the Ricardo- Barro effect, a budget deficit has no effect on either the real interest rate or investment.

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Definitions:

Clayton Act

A piece of antitrust legislation enacted in the United States to promote competition and reduce monopolistic practices by prohibiting certain actions that could lead to anti-competitive outcomes.

Clayton Act

A piece of U.S. legislation enacted in 1914 aimed at promoting competition among enterprises and preventing monopolies by outlawing certain anti-competitive practices.

Sherman Act

A landmark federal statute passed in 1890 aimed at promoting competition among businesses by prohibiting monopolies and other activities that restrained trade.

Clayton Act

A U.S. law enacted in 1914 aimed at promoting competition by preventing mergers and acquisitions that could significantly reduce market competition.