France's Government Is Running a Budget Deficit

question 42

Multiple Choice

France's government is running a budget deficit. With no Ricardo-Barro effect, which of the following events will occur?
I. The supply curve of loanable funds will shift leftward.
II. A higher real interest rate crowds out investment.
III. Saving increases.

• A) I and II
• B) II and III
• C) I only
• D) III only

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