For This Question,assume That Ricardian Equivalence Proposition Does Not Hold

question 3

Essay

For this question,assume that Ricardian Equivalence proposition does not hold.Briefly discuss the short-run,medium-run and long-run effects of a fiscal expansion (e.g.tax cut).

---

Definitions:

Cash Receipts

Money received during a period, especially in relation to business transactions.

Cash Payments

Transactions in which payment for goods, services, or obligations is made in cash at the time of the transaction or shortly thereafter.

Financing Activities

Transactions involving external sources of funding, including equity, debt, dividends, and repayment of loans, that are reported in the cash flow statement.

Cash Dividends

payments made to shareholders out of a company’s profits, distributed as cash.