Ricardian Equivalence Predicts That

question 105

Multiple Choice

Ricardian equivalence predicts that:

• A) people will not change their behavior if the government cuts taxes but does not change its spending.
• B) tax cuts will have an expansionary effect only if people expect higher tax payments in the future.
• C) tax cuts will have a greater expansionary effect than increases in government spending.
• D) None of these are true.

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Definitions:

Taylorism

A management theory developed by Frederick W. Taylor that emphasizes scientific studies of tasks and time management to improve work efficiency.

Outsourcing

The process where a company hires another company or individual to perform tasks, handle operations or provide services that are either difficult to manage or outside of the hiring company's expertise.

Efficient Operations

The ability of an organization to achieve its objectives with minimum wastage of resources and optimum productivity.

Individual Growth

The personal development and enhancement of skills, knowledge, and abilities over time.