If There Is No Ricardo-Barro Effect, an Increase in the Government

question 54

Multiple Choice

If there is no Ricardo-Barro effect, an increase in the government budget surplus

• A) decreases private saving.
• B) increases private saving.
• C) decreases the supply of loanable funds.
• D) increases the supply of loanable funds.
• E) has no effect on the demand for loanable funds, the supply of loanable funds, or the real interest rate.

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Definitions:

Intentional Deceit

The act of deliberately misleading or deceiving someone, often for personal gain or to deceive.

Fraudulent Misrepresentation

Occurs when a false statement is knowingly made to induce another party to act, resulting in harm or loss.

Puffery

A salesperson’s exaggerated claims concerning the quality of goods offered for sale. Such claims involve opinions rather than facts and are not considered to be legally binding promises or warranties.

Fraudulent Misrepresentation

False statements or claims made knowingly with the intention of deceiving another party, leading them to enter into a contract or agreement.