Evidence to Support the Ricardo-Barro Effect Would Show That

question 84

Multiple Choice

Evidence to support the Ricardo-Barro effect would show that

• A) higher government budget deficits decrease investment.
• B) higher government budget surpluses decrease investment.
• C) government budget deficits increase household consumption.
• D) government budget deficits have no effect on the real interest rate or investment.
• E) higher government budget deficits raise the real interest rate.

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