The Ricardo-Barro Effect Argues That the Crowding-Out Effect

question 109

Multiple Choice

The Ricardo-Barro effect argues that the crowding-out effect

• A)is the result of a government budget surplus and higher interest rates.
• B)is stronger when the government runs a budget surplus than when it runs a budget deficit.
• C)is the result of the government budget deficit and higher interest rates.
• D)will occur, because the private saving supply will change to offset any change in the government budget deficit.
• E)will not occur, because the private saving supply will change to offset any change in the government budget deficit.

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Definitions:

Internal Factors

Elements within an individual or organization that influence behavior, decisions, and outcomes, such as beliefs, values, and personal motivation.

Social Cohesion

The bonds that bring people together in a society, fostering unity, solidarity, and a sense of belonging among its members.

Realistic Conflict Theory

A social psychology theory that suggests competition for limited resources leads to conflict between groups, resulting in increased prejudice and discrimination.

Ultimate Attribution Error

The tendency to ascribe the cause of a behavior to the dispositions of the group rather than to situational factors when evaluating behaviors of groups different from one's own.