Suppose the Government Has a Budget Deficit of $2 Billion

question 37

Multiple Choice

Suppose the government has a budget deficit of $2 billion.If there is no Ricardo-Barro effect, how much crowding out of investment occurs?

• A) more than $2 billion
• B) some crowding out occurs, but less than $2 billion
• C) exactly equal to $2 billion dollars
• D) no crowding out occurs and investment does not change
• E) no crowding out occurs because investment increases

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Definitions:

Proportion

The fraction or percentage of a total that is accounted for by a specific group, characteristic, or outcome.

Business School Graduates

Individuals who have completed a degree program at a business school, typically specializing in business administration or management.

Frequency Distribution

The representation, often in a table or graph, of the number of times each value appears in a set of data.

Pie Chart

A round diagram segmented to represent numerical ratios.