Suppose you are analyzing data for an economy in which Ricardian neutrality holds true. If the budget surplus increases by 100, then:
A. private savings will increase by 100.
B. private savings will decrease by 100.
C. investment will increase by 100.
D. investment will decrease by 100.
Answer:B
Suppose you are analyzing data for an economy in which Ricardian neutrality holds true. If the budget surplus increases by 100, then:
A. private savings will increase by 100. B. private savings will decrease by 100. C. investment will increase by 100. D. investment will decrease by 100.
Explanation: Type: Multiple Choice