Ricardian Equivalence

question 104

Multiple Choice

Ricardian equivalence:

• A) is the decrease in private spending that occurs when government increases spending.
• B) occurs when people see that lower taxes today means higher taxes in the future,so instead of spending their tax cut they save it to pay future taxes.
• C) is federal government policy on taxes,spending,and borrowing that is designed to influence business fluctuations.
• D) is central bank policy on the monetary base,interest rates,and bank reserves that is designed to influence business fluctuations.

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Definitions:

Cyclothymic Disorder

A mental disorder characterized by periods of hypomanic symptoms as well as periods of depressive symptoms that are not severe enough to qualify as major depressive episodes.

Major Depressive Episode

A period characterized by a severely depressed mood or a loss of interest or pleasure in daily activities, lasting for at least two weeks.

Hypomania

A milder form of mania, characterized by elevated mood, increased activity or energy levels that are not as severe as full-blown mania.

Bipolar I Disorder

Form of bipolar disorder in which the full symptoms of mania are experienced; depressive aspects may be more infrequent or mild.