If Government Spending Is Held Constant and Ricardian Equivalence Holds

question 33

Multiple Choice

If government spending is held constant and Ricardian equivalence holds

• A)an increase in the government budget deficit is always matched by a reduction in private savings.
• B)an increase in government savings is always matched by an equal increase in private savings.
• C)an increase in government savings is always matched by an increase in the government budget deficit.
• D)an increase in government savings is always matched by an increase in the real interest rate.
• E)an increase in government savings is always matched by an equal reduction in private savings.

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