Which of the Following Correctly Explain Ricardian Equivalence

question 29

Multiple Choice

Which of the following correctly explain Ricardian equivalence?

• A)Government spending that is financed by borrowing has a smaller effect on the economy than government spending financed by raising taxes.
• B)Consumers do not base current spending on future expected tax liabilities.
• C)Government borrowing can function like increased current taxes, reducing current household and business expenditures.
• D)The government should balance its budget by equating revenue and expenditure in every fiscal year.
• E)Government spending does not crowd out private investment.

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Definitions:

Manufacturing

The process of producing goods and products using raw materials and machinery.

Substantive Dimension

Refers to the focus on the content or substance of industrial relations, including wages, working conditions, and employment terms.

Union Democracy

Union democracy refers to the practice and principle of democratic governance within labor unions, where decisions are made through the voting and participation of its members.

Union Suppression

Tactics used by employers or governments to inhibit union formation, diminish the power of existing unions, or discourage union membership and activities.