According to the Ricardo-Barro Effect

question 52

Multiple Choice

According to the Ricardo-Barro effect,

• A)government deficits raise the real interest rate.
• B)taxpayers fail to foresee that government deficits imply higher future taxes.
• C)households increase personal saving when governments run budget deficits.
• D)government budget deficits increase households' expected future disposable income.
• E)a government deficit decreases the supply of loanable funds.

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