According to the Ricardian Equivalence Theorem, Government Deficits Do Not

question 3

Multiple Choice

According to the Ricardian equivalence theorem, government deficits do not affect output because people:

• A)save more when government deficits decrease.
• B)save more when government deficits increase.
• C)consume more when government deficits increase.
• D)do not change consumption nor savings.

---

Definitions:

Smooth

Relating to or having an even and continuous surface or texture; typically free from perceptible projections, lumps, or indentations.

Involuntary

Occurring without the individual's conscious control; often refers to physiological responses or reflex actions.

Cardiac

Pertaining to the heart and its functions.

Muscle

Tissues in the body that have the ability to contract, making movement possible.