With an increase in political tension, many governments increased defense spending, which decreased government budget surpluses. Show,

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With an increase in political tension, many governments increased defense spending, which decreased government budget surpluses. Show, on a graph, the effects of a decrease in government budget surpluses if there is no Ricardo-Barro effect. Explain how the effects differ if there is a partial Ricardo-Barro effect.

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Foundations of Macroeconomics

ISBN: 978-0134492001

8th edition

Authors: Robin Bade, Michael Parkin

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