The Ricardo-Barro Effect Is Based on the Idea That ________

question 31

Multiple Choice

The Ricardo-Barro effect is based on the idea that ________ when the government has a budget deficit.

• A)investment demand decreases because of the higher real interest rate
• B)investment demand increases because expected future profits increase
• C)people increase their private saving
• D)people immediately increase their tax payments
• E)people decrease their private saving

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Definitions:

Store

A physical or online place where goods or services are offered for sale.

Indexed Property

A property in computer programming that allows accessing elements by an index, similar to an array.

Currency

A medium of exchange, such as paper bills and coins, used to facilitate the transfer of goods and services.

Percent

A numerical value or ratio expressed as a fraction of 100, commonly used to describe proportions or comparisons between quantities.