The Lesson to Be Learned from the Ricardian Equivalence Proposition

question 49

Multiple Choice

The lesson to be learned from the Ricardian equivalence proposition is that

• A)only government budget deficits generated by tax changes affect the macroeconomy.
• B)government budget deficits do not affect the macroeconomy.
• C)it is impossible for the government to actually reduce taxes.
• D)the basic measure of the cost of government is the real resources that the government uses.

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Definitions:

Hormone-disrupting Chemicals

Substances that interfere with the normal functioning of the endocrine system, potentially causing developmental, reproductive, neurological, and immune problems.

Human Health

Overall state of physical, mental, and social well-being for individuals or populations, not merely the absence of disease.

Racism

A doctrine of superiority by which one group justifies the degrading of others based on their distinctive physical characteristics.

Thrifty Genotype

A hypothesis suggesting that certain genotypes, which efficiently store fat, increased survival during periods of famine, but predispose individuals to type 2 diabetes in modern environments with constant food availability.