Problem
Suppose the government's budget is currently in balance but the government is projected to run a large deficit in the future because of large projected increases in spending. Assume Ricardian equivalence is true. How will these projected deficits affect current national saving if households expect that taxes will be raised in the future? How will the current equilibrium real interest rate and investment be affected?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.