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Georgia [21]
2 years ago
7

The ricardo-barro effect suggests that the government budget deficit has ________ influence on the real interest rate.

Social Studies
1 answer:
Zarrin [17]2 years ago
3 0

The Ricardo- Barro effect suggests that the government budget deficit has no effect on influence on the real interest rate.

The Ricardo-Barro effect is an theory in economics that suggests that when a government tries to stimulate an economy by increasing debt-financed government spending, the demand remains unchanged.    

Deficits increase the demand for loanable funds and surpluses decrease the demand for loanable funds. The indicate that if the government runs a deficit, it has to borrow money just like everyone else.

To learn more Ricardo- Barro effect,

brainly.com/question/4307159

#SPJ4

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