Ricardian Equivalence Refers to the Same Impact of Financing Government

question 41

Multiple Choice

Ricardian equivalence refers to the same impact of financing government:

• A) whether by printing money or raising taxes.
• B) in the long run as in the short run.
• C) whether by debt or taxes.
• D) in an open economy as in a closed economy.

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Definitions:

Positive Association

A relationship between two variables where an increase in one variable is associated with an increase in the other variable.

Strong Association

A term indicating a high level of correlation between two variables, suggesting that changes in one are closely linked to changes in the other.

Nonlinear

Referring to a relationship or equation that does not form a straight line when graphed, often indicating a more complex relationship between variables.

Negative

In mathematics, a negative number is a real number that is less than zero.