If the Ricardian Equivalence Is True,a Tax Cut Will

question 59

Multiple Choice

If the Ricardian equivalence is true,a tax cut will

• A)increase the current account surplus.
• B)decrease the current account surplus.
• C)have no effect on the current account.
• D)increase national saving.

---

Definitions:

Required Rate

A term often used to signify the minimum return or yield that investors expect from an investment, considering the risk involved.

Average Operating Assets

A metric representing the average value of the assets involved in the operating activities of a business over a period.

Contribution Margin

The difference between sales revenue and variable costs of a product or service, indicating the amount contributing to covering fixed costs and generating profit.