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.

---

Definitions:

Economic Growth Rates

The rate at which a nation's Gross Domestic product (GDP) grows or declines.

Economic Growth Rates

Measures the rate of growth in a country's economy over a specific period, often expressed as a percentage increase in real GDP.

Future Innovations

Anticipated advancements and new technologies that are expected to occur in the future.

Productivity

The measure of the efficiency of production, often quantified as the ratio of outputs to inputs in the production process.