Author Question: The Ricardo-Barro effect says that a government budget deficit leads to A) no change in the real ... (Read 74 times)

Mr.Thesaxman · **on:** Jun 29, 2018

The Ricardo-Barro effect says that a government budget deficit leads to

A) no change in the real interest rate.
B) a lower real interest rate.
C) an increase in the quantity of investment.
D) a higher real interest rate.
E) an increase in demand for loanable funds.

Question 2

The natural rate hypothesis asserts that

A) changes in the unemployment rate from changes in the inflation rate are temporary.
B) changes in the unemployment rate are natural and long-lasting.
C) when prices change, the inflation rate changes temporarily and then returns to its natural rate.
D) changes in the natural unemployment rate are only temporary.
E) price changes occur at a natural rate, near a 6 percent average inflation rate.