The table sets out the data for an economy when the government's budget is balanced.

If the government's budget becomes a deficit of $$1\mathrm{.}0$ billion and the Ricardo$-$Barro effect occurs, what are the real interest rate and investment?

If the Ricardo$-$Barro effect occurs, and if the government's budget becomes a deficit of $$1\mathrm{.}0$ billion, the real interest rate is ${9\mathrm{.}0}^{\text{'}}$ percent a year and the quantity of investment is $$5\mathrm{.}5$ billion.

There Answer to $1$ decimal place.

Points: $0$ of $1$

$q,$ crowding out in this situation because $$A$.$ is; is;investment is $$5\mathrm{.}5$ billion but private saving is $$6\mathrm{.}5$ billion, which means that investment is decreased by the amount of the government deficitB. is no; the government budget deficit does not influence the real interest rate.