One Objection to the Notion of Ricardian Equivalence Is That

question 71

Multiple Choice

One objection to the notion of Ricardian Equivalence is that ________.

• A)households will recognize that a tax cut today will only lead to a tax increase in the future
• B)individuals are short-sighted in their spending decisions
• C)borrowing constraints have largely been eliminated due to financial innovation in the provisioning of consumer credit
• D)households typically save most of the monies received from a tax cut