The Ricardo-Barro Effect Holds That

question 67

Multiple Choice

The Ricardo-Barro effect holds that

• A) equal increases in taxes and government expenditures have no effect on equilibrium real GDP.
• B) government budget deficits have no effect on the real interest rate.
• C) a government budget deficit crowds out private investment.
• D) a government budget deficit induces a decrease in saving that magnifies the crowding out effect.

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Definitions:

Onlooker Play

A stage of play where a child watches others play but does not engage directly, serving as a form of learning social cues and interactions.

Formal Play

Structured play activities that are governed by rules and often involve goals or objectives, contrasting with spontaneous or free play.

Associative Play

A stage of play primarily observed in young children, where they play in parallel to each other but engage in group activities, sharing and talking.

Prosocial Behavior

Behaviors that are intended to benefit others, including acts of kindness, helping, and generosity.