Ricardian Equivalence Will Fail to Hold If

question 32

Multiple Choice

Ricardian equivalence will fail to hold if:

• A)people increase their spending when they receive a tax rebate check.
• B)people save,and do not increase their spending when they receive a tax rebate check.
• C)intended expansionary effects of tax policy fail to occur.
• D)None of these is true.

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Definitions:

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