If Ricardian Equivalence Is Correct,any Tax Cut Will Cause Consumer

question 253

Multiple Choice

If Ricardian equivalence is correct,any tax cut will cause consumer spending to:

• A) increase.
• B) decrease.
• C) remain unchanged.
• D) change in an unpredictable manner.

---

Definitions:

Self-serving Bias

A cognitive bias where individuals attribute their successes to internal factors and failures to external factors.

In-group/out-group Bias

Describes the tendency to favor members of one's own group (the in-group) over those from different groups (the out-group), often leading to prejudice and discrimination.

Fundamental Attribution Error

The tendency to overemphasize personality-based explanations for behaviors observed in others while underestimating the influence of situational factors.

Situational Causes

External environmental factors or conditions that influence an individual's behavior or outcomes, as opposed to intrinsic or internal factors.