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

question 203

Multiple Choice

If there is no Ricardo-Barro effect, a government budget deficit will ________ the equilibrium real interest rate and ________ the equilibrium quantity of investment.

• A) raise; increase
• B) raise; decrease
• C) lower; increase
• D) lower; decrease
• E) not change; not change

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Definitions:

Disconnected Thoughts

A symptom often observed in various psychiatric conditions, where an individual's thoughts are disjointed, lack clear connection, or coherence.

Therapeutic Response

An individual's positive reaction or improvement in symptoms following a particular treatment or intervention.

Conventional Antipsychotic

A class of drugs primarily used to treat schizophrenia and other psychotic disorders by blocking dopamine receptors.

Social Isolation

A state where an individual has a minimal amount of social contact, leading to feelings of loneliness and disconnectedness from others.