Since Poland joined the European Union in 2004, many young and educated Poles have emigrated to the United Kingdom. As a result, the labor supply curve in the United Kingdom shifts to the right and the equilibrium wage rises

Economic models are used to

A) represent the complexities of economic environments. B) explain every detail of an economic theory. C) explore decision making by individuals, firms and other organizations. D) build physical renditions of government construction projects.

A prediction of the Ricardo-Barro effect is

A) a larger decrease in the real interest rate when the government runs a budget surplus. B) no effect on the real interest rate when the government runs a budget deficit. C) a larger decrease in investment when the government runs a budget deficit. D) a larger increase in the real interest rate when the government runs a budget deficit. E) a larger decrease in investment when the government runs a budget surplus.