Ricardian Equivalence Is the Proposition That

question 51

Multiple Choice

Ricardian equivalence is the proposition that

• A) government expenditure should only be financed by issuing new debt.
• B) it does not matter whether government expenditure is financed by taxes or debt.
• C) it does not matter whether government expenditure is financed by creating new money or issuing debt.
• D) government expenditure should only be financed by taxes.

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Definitions:

Mental Activity

Any cognitive operation or process by which an individual becomes aware of or perceives ideas, thoughts, and feelings.

Physical Activity

Any bodily movement produced by skeletal muscles that requires energy expenditure, contributing to overall health.

Hypnotized

Being hypnotized refers to a trance-like state of focused attention and heightened suggestibility, usually induced by a hypnotist.

Suggestibility

A measure of how susceptible a person is to influence by suggestions, often used in psychological contexts to explore how people can be influenced by others' ideas or misremember events.