When the Deficit Increases Under the Concept of Ricardian Equivalence

question 96

Multiple Choice

When the deficit increases under the concept of Ricardian Equivalence, what happens to savings in the private sector?

• A) nothing
• B) savings decrease
• C) savings increase
• D) savers hedge on purchases

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Definitions:

Internal Control Procedures

Methods and guidelines set up by an organization to guarantee the accuracy of fiscal and accounting data, encourage responsibility, and deter dishonest practices.

Bank Reconciliation

The process of matching and comparing figures from the accounting records against those presented on a bank statement to ensure consistency and accuracy of financial data.

Memoranda

Brief, informal written records used to aid memory or inform others within an organization.

Deposits In Transit

Funds that have been sent to a bank but have not yet been recorded in the bank's records, leading to a discrepancy between the company’s cash records and bank statement.