When There Is No Ricardo-Barro Effect,a Government Budget Surplus ________

question 44

Multiple Choice

When there is no Ricardo-Barro effect,a government budget surplus ________ the real interest rate because the ________ loanable funds increases.

• A)raises;supply of
• B)lowers;supply of
• C)lowers;demand for
• D)raises;demand for
• E)None of the above answers is correct because the real interest rate does not change.

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Definitions:

Availability of Substitutes

The presence of alternative goods or services that consumers can switch to when prices rise or quality decreases, affecting market demand and competition.

Bus Service

A public or private system offering regular travel on established routes by buses for the transportation of individuals.

Bus Fares

The charges levied for traveling on a bus, typically based on the distance or zones traveled.

Revenues Dropped

A situation in which the total income generated by a business from its activities decreases compared to a previous period.