In Response to a Tax Cut, the Consumption of a Consumer

question 9

Multiple Choice

In response to a tax cut, the consumption of a consumer who is borrowing-constrained ______, whereas the consumption of a forward-looking, unconstrained consumer acting in accord with Ricardian equivalence ______.

• A) increases; increases
• B) increases; remains unchanged
• C) remains unchanged; remains unchanged
• D) remains unchanged; increases

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Definitions:

2,4-dinitrofluorobenzene

A chemical compound featuring a benzene ring substituted with two nitro groups (NO2) at the 2 and 4 positions and a fluorine atom at the 1 position.

N-terminal

Refers to the start of a protein or polypeptide terminated by an amino acid with a free amine group.

Amino Acid

A building block of proteins, characterized by an amino group (-NH2), a carboxyl group (-COOH), and a specific side chain.

Tripeptide

A molecule composed of three amino acids linked by peptide bonds.