According to David Ricardo, an Increase in Government Spending Without

question 104

Multiple Choice

According to David Ricardo, an increase in government spending without any tax increase will not increase aggregate demand because

• A)consumers will consume less and save more to prepare for increased taxes in the future.
• B)the private sector is more likely than the public sector to spend any extra income on national defense.
• C)consumers will increase their consumption proportionately more than Keynesian economists believe they will.
• D)consumers will save less than they otherwise would have.

---

Definitions:

Right-Skewed

Describes a distribution of data where the tail on the right side of the distribution is longer or fatter than the left side, indicating that the mean is greater than the median.

Standard Deviation

The square root of the variance, measuring the dispersion of a dataset relative to its mean.

Mean

The mathematical calculation where you add all the numbers in a set and divide by the number of elements to find the average.

Mound-Shaped Distribution

A data distribution that is symmetric and bell-shaped, often resembling the normal distribution but not necessarily having its mathematical properties.