Ricardian Equivalence Argues That When the Government Cuts Taxes and Raises

question 25

Multiple Choice

Ricardian equivalence argues that when the government cuts taxes and raises its deficit,

• A) consumers anticipate that they will face lower taxes later to pay for the resulting government debt.
• B) consumers anticipate that they will higher services from the government.
• C) consumers anticipate that they will face higher taxes later to pay for the resulting government debt.
• D) consumers anticipate it will affect their future taxes, in general in the direction of lowering future taxes.
• E) consumers anticipate that the low tax rates will continue.

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Variety

The range or assortment of different types of goods, products, or services available.

Acres

A measurement of land area used primarily in the United States and the United Kingdom, with one acre equaling approximately 4,046.86 square meters or 43,560 square feet.

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Grass varieties that are being tested or studied, often for their resistance to drought, disease, or their impact on ecosystems.