Ricardian Equivalence Theory Assumes That ________

question 61

Multiple Choice

Ricardian Equivalence theory assumes that ________.

• A)an anticipated increase in the income of future generations will reduce the amount that is saved today on their behalf
• B)government spending remains constant
• C)many people are subject to borrowing constraints
• D)tax cuts have a positive impact on aggregate supply

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Definitions:

Special Journals

Accounting journals designed for recording and categorizing specific types of transactions for efficiency and specialization.

Posting Process

The accounting procedure of transferring journal entry information to the ledger to update account balances.

General Ledger

The General Ledger is a complete record of all financial transactions over the life of a company, organized by accounts.

Sales Journal

is a specialized accounting journal used to record all sales transactions of a business on credit.