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; decrease
B) raise; increase
C) lower; increase
D) not change; not change
E) lower; decrease
A
You might also like to view...
When the Fed purchases U.S. government securities through the open market, the money supply: a. increases, the interest rate falls, and the quantity of money demanded increases. b. falls, the interest rate falls, and the quantity of money demanded increases
c. increases, the interest rate increases, and the quantity of money demanded increases. d. falls, the interest rate increases, and the quantity of money demanded falls. e. falls, the interest rate falls, and the quantity of money demanded falls.
People can generally get the following items at their commercial banks, except:
A. Money market deposit accounts B. Time deposits C. Certificates of deposit D. Money market mutual funds