If There Is No Ricardo-Barro Effect, a Government Budget Deficit

question 256

Multiple Choice

If there is no Ricardo-Barro effect, a government budget deficit increases

• A) private savings and raises the real interest rate.
• B) the supply of loanable funds and raises the real interest rate.
• C) the demand for loanable funds and raises the real interest rate.
• D) investment demand and lowers the real interest rate.
• E) private savings and lowers the real interest rate.

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Definitions:

Cultural Psychologist

A psychologist who studies how cultural traditions and social practices influence human behavior, thoughts, and emotions.

Cognitive Errors

Mistakes in reasoning, evaluating, remembering, or other cognitive processes, often occurring due to holding onto personal biases or irrational beliefs.

Positive Psychology

A branch of psychology that focuses on studying and promoting well-being and happiness.

Human Behaviour

The range of actions and mannerisms exhibited by humans in conjunction with their environment, influenced by culture, attitudes, emotions, and genetics.