If Government Spending Is Held Constant and Ricardian Equivalence Holds

question 44

Multiple Choice

If government spending is held constant and Ricardian equivalence holds,

• A) an increase in the government budget deficit is always matched by a reduction in private savings.
• B) an increase in government savings is always matched by an increase in the government budget deficit.
• C) an increase in government savings is always matched by an equal increase in private savings.
• D) an increase in government savings is always matched by an equal reduction in private savings.

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Definitions:

Continental Congress

First meeting of representatives of the colonies, held in Philadelphia in 1774 to formulate actions against British policies; in the Second Continental Congress (1775–1789), the colonial representatives conducted the war and adopted the Declaration of Independence and the Articles of Confederation.

Language of Freedom

Often refers to the rhetoric and terminology used to discuss and promote concepts of liberty, rights, and democracy, particularly in political and social contexts.

Abigail Adams

An early American advocate for women's rights and the wife of John Adams, the second President of the United States.

State Constitutions

Documents that define the structure, functions, and principles of government at the state level in the United States, each varying to reflect local values and needs.