A prediction of the Ricardo-Barro effect is
A) a larger decrease in the real interest rate when the government runs a budget surplus.
B) no effect on the real interest rate when the government runs a budget deficit.
C) a larger decrease in investment when the government runs a budget deficit.
D) a larger increase in the real interest rate when the government runs a budget deficit.
E) a larger decrease in investment when the government runs a budget surplus.
Question 2
An economy's resources include
A) raw materials.
B) factories and machinery.
C) human knowledge.
D) all of the above
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