Suppose the government has a budget deficit of $2 billion. If the Ricardo-Barro effect is correct, then how much crowding out of investment occurs?
1) more than $2 billion
2) some crowding out occurs, but less than $2 billion
3) exactly equal to $2 billion dollars
4) No crowding out occurs and investment does not change
5) No crowding out occurs because investment increases by $2 billion