The Ricardo-Barro effect argues that the crowding-out effect
A) is the result of the government budget deficit and higher interest rates.
B) will occur, because the private saving supply will change to offset any change in the government budget deficit.
C) is stronger when the government runs a budget surplus than when it runs a budget deficit.
D) is the result of a government budget surplus and higher interest rates.
E) will not occur, because the private saving supply will change to offset any change in the government budget deficit.
E
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A currency is undervalued if its exchange rate vis-à-vis a foreign currency is:
A) not pegged. B) at the equilibrium exchange rate. C) above the equilibrium exchange rate. D) below the equilibrium exchange rate.
Which of the following characteristics is a precondition for economic growth? i. economic freedom ii. free markets iii. active government policy to discourage saving
A) i only B) ii only C) iii only D) Both i and ii E) Both ii and iii