If the government's budget deficit increases and the Ricardo-Barro effect does not apply

A) the real interest rate rises.
B) investment increases.
C) investment decreases.
D) Both answers A and C are correct.

D

Economics

You might also like to view...

Which of the following events will most likely cause an increase in both the price level and rGDP?

A) The prime rate increases B) Exports increase C) Income taxes increase D) Crude oil prices decrease E) Inflationary expectations decrease

Economics

It is easier for a monopolist to price discriminate between groups for a service than for a good because

A) it is easier to calculate average willingness to pay for services. B) it is easier to distinguish between groups of customers for services than customers for goods. C) it is easier for consumers to resell goods than resell services. D) customers for goods usually do not differ with respect to their average willingness to pay.

Economics