According to the Ricardo-Barro effect, a government budget
A) deficit decreases private saving supply.
B) surplus decreases private investment demand.
C) deficit increases private saving supply.
D) surplus increases private saving supply.
E) deficit decreases private investment demand.
Question 2
Along the long-run Phillips curve, the unemployment rate ________, and the inflation rate ________.
A) can be any value; is equal to the natural inflation rate
B) is equal to the natural unemployment rate; is equal to the natural inflation rate
C) is equal to the natural unemployment rate; can be any value
D) can be any value; can be any value
E) None of the above answers is correct.
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