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kokobean1130 kokobean1130
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7 years ago
Suppose the government has a budget deficit of $2 billion. If the Ricardo-Barro effect is correct, then how much crowding out of investment occurs?
   
A.more than $2 billion
B.some crowding out occurs, but less than $2 billion
C.exactly equal to $2 billion dollars
D.No crowding out occurs and investment does not change.
E.No crowding out occurs because investment increases by $2 billion.
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Valued Member
Educator
7 years ago
Some crowding out occurs, but less than $2 billion
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