The Ricardian Equivalence Theorem Implies That

question 31

Multiple Choice

The Ricardian equivalence theorem implies that

• A) government debt policy must be handled correctly for the economy to prosper.
• B) the amounts of government spending are neutral.
• C) an increase in government spending has no effect on the economy, as long as there is an equal change in taxes.
• D) the timing of taxes collected by the government is neutral.

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Definitions:

College Degree

An academic degree awarded by colleges or universities upon completion of a course of study demonstrating mastery in a specific field of study or profession.

Cohabit

A rephrased definition for cohabitation, referring to the lifestyle of partners who live together in an intimate relationship without being married.

High School Education

A secondary education level that provides students with knowledge and skills necessary for entering higher education or the workforce.

Cohabitation

Being in a state where individuals live together and share a sexual connection without being wed.