If the Ricardian Equivalence Were True, the Effect of an Increase

question 100

Multiple Choice

If the Ricardian Equivalence were true, the effect of an increase in government expenditure

• A) is effective only if done both by borrowing and by taxation.
• B) is the better it is financed by borrowing instead of taxation.
• C) is the same regardless on whether it is financed by borrowing or by taxation.
• D) is the better it is financed by taxation instead of borrowing.

---

Definitions:

Occasion Setting

The process by which a stimulus signals the appropriate context for a certain response or behavior to occur.

Orbital Frontal Cortex

A region of the frontal lobes of the brain involved in the cognitive processing of decision-making and emotion regulation.

Sutherland and Mackintosh

A reference to influential figures in the field of psychology, possibly related to theories of learning or cognitive processes, but without a specific context, it is imprecise.

Perceptual Analyzers

Systems or processes in the human brain that interpret stimuli from the environment by breaking down the input into more manageable components.