In the figure above, the DLF curve is the demand for loanable funds curve and the PDLF curve is the private demand for loanable funds curve
If there is no Ricardo-Barro effect, the figure shows the situation in which the government has a ________ so that the equilibrium real interest rate is ________ and the equilibrium quantity of investment is ________.
A) budget deficit; 6 percent; $1.5 trillion
B) balanced budget; 6 percent; $1.5 trillion
C) budget surplus; 4 percent; $1 trillion
D) budget surplus; 6 percent; $1.5 trillion
E) budget deficit; 4 percent; $1 trillion
A
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What does research tell us about the impact of Ricardian equivalence effects on the economy?
A) Ricardian equivalence effects may exist, but their magnitudes are unclear. B) There is no evidence of any impact of Ricardian equivalence effects. C) Ricardian equivalence effects have a huge impact on aggregate demand. D) There is a very small impact on both aggregate demand and aggregate supply.
What has been the most significant obstacle to progress in the Doha Round?
What will be an ideal response?