France's Government Is Running a Budget Deficit

question 42

Multiple Choice

France's 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 and II
• B) II and III
• C) I only
• D) III only

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Definitions:

Alliances

Associations formed between countries, organizations, or individuals for mutual benefit or to achieve common goals.

Organize

To arrange and coordinate activities or items systematically for efficiency or clarity.

Plaintiff

An individual or group that brings a lawsuit against another party in a court of law, alleging harm or wrongdoing.

Defendant

An individual, company, or institution sued or accused in a court of law.