An Important Reason Why Ricardian Equivalence May Fail Is If

question 51

Multiple Choice

An important reason why Ricardian equivalence may fail is if

• A)real interest rates start to increase.
• B)state and local governments also engage in debt finance.
• C)some consumers are borrowers, while other consumers are lenders.
• D)borrowing and lending is done through intermediaries.
• E)government debt incurred today may not be paid off until after some current consumers are deceased.

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Definitions:

Average Outgoing Quality

The average quality level of products after defective items have been removed through screening or quality control procedures.

Inspection

A means of ensuring that an operation is producing at the quality level expected.

Specific Causes

Unique factors or circumstances that can lead to specific outcomes or effects, distinguished from general or common causes.

Acceptance Sampling

A statistical quality control method where a random sample of items from a lot is inspected to decide if the whole lot should be accepted or rejected.