The Ricardian Equivalence Proposition Is NOT Supported by Evidence,because

question 75

Multiple Choice

The Ricardian equivalence proposition is NOT supported by evidence,because

• A)consumers may respond to the current tax cut by increasing their desired consumption.
• B)consumers may increase their saving to respond to future tax increase.
• C)consumers do not change their consumption because they expect an increase in future tax rates.
• D)a cut in current tax does not affect the ultimate tax burden borne by consumers.

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Definitions:

Immigration

The process of permanently relocating to a country that is not one's native homeland.

Productivity Growth

The rate at which a company or economy can produce more goods and services with the same amount of labor, capital, energy, and materials, often seen as a key driver of economic growth.

Savings Rate

The proportion of disposable income that is saved by households rather than spent on goods or services.

Mass Production

The manufacture of large quantities of standardized products, often utilizing assembly lines or automated technology.