If the Government Begins to Run a Larger Budget Deficits

question 107

Multiple Choice

If the government begins to run a larger budget deficits, then assuming there is no Ricardo-Barro effect, the demand for loanable funds ________ and the real interest rate ________.

• A) decreases; falls
• B) decreases; rises
• C) increases; rises
• D) increases; falls

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Definitions:

Tab Marker

A feature in word processing and text editing applications that allows users to set precise stop points for text alignment using the Tab key.

Ruler

A tool in many software applications that provides a visual guide for aligning text, images, and other elements within a document.

Border from Paragraph

A style option that adds a visible outline around a paragraph's text in a document.

No Border Button

A tool in software applications used to remove the border from a selected object or table cell.