According to the Ricardo-Barro effect, O A. a government deficit crowds out investment O B. a government deficit leads to lower taxes in the future O C. taxpayers decrease their saving by an amount equal to the government budget deficit O D. taxpayers increase their saving by an amount equal to the government budget deficit

According to the Ricardo-Barro effect, O A. a government deficit crowds out investment O B. a government deficit leads to lower taxes in the future O C. taxpayers decrease their saving by an amount equal to the government budget deficit O D. taxpayers increase their saving by an amount equal to the government budget deficit

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Public Saving

Public saving deals with the amount which has been in excess after meeting all the obligatory expenses and investment of the government. Taxes are collected by the government to meet its day-to-day expenditures. The obligatory expenses include all those expenses which are mandatory for the government. It cannot be avoided as it is inevitable.

Question

According to the Ricardo-Barro effect,
O A. a government deficit crowds out investment
B. a government deficit leads to lower taxes in the future
O C. taxpayers decrease their saving by an amount equal to the government budget deficit
O D. taxpayers increase their saving by an amount equal to the government budget deficit

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