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:

Universal Bussing

A policy or system where bus transportation is provided to all people within a certain area, often for free or at a universal rate.

High School System

The educational institutions and organizational structure designed to provide secondary education and prepare students for higher education or the workforce.

School Vouchers

Government-funded scholarships given to parents to pay for their children’s education in a school of choice, rather than the public school to which they are assigned.

Social Environment

The immediate physical and social setting in which people live or in which something happens or develops, including the culture they belong to and the people they interact with.