The Ricardian Equivalence Theorem Implies That

question 11

Multiple Choice

The Ricardian equivalence theorem implies that

• A)the timing of taxes collected by the government is neutral.
• B)an increase in government spending has no effect on the economy, as long as there is an equal change in taxes.
• C)government debt policy must be handled correctly for the economy to prosper.
• D)the present value of government spending must be equal to the present value of taxes.
• E)the amounts of government spending are neutral.

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Definitions:

Pronation

The movement of rotating the forearm or foot so that the palm or sole is facing downwards or backwards.

Circumduction

A circular movement of a body part, such as a limb, that outlines a cone shape.

Circumduction

A movement that combines flexion, extension, abduction, and adduction in such a way that the distal end of the body part moves in a circle.

Rotation

The act of rotating around an axis or center, often referred to in physics and mechanics, or the movement around a joint in anatomy.