The Logic of Ricardian Equivalence Implies That

question 16

Multiple Choice

The logic of Ricardian equivalence implies that:

• A) tax cuts do not influence consumer spending but changes in government spending do.
• B) neither tax cuts nor changes in government spending affect consumer spending.
• C) tax cuts combined with future decreases in government spending will decrease consumer spending.
• D) if the government cuts taxes and increases current government spending, consumer spending will increase.

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Definitions:

Babinski Reflex

A physical reflex observable in infants, where fanning and curling toes occur when the sole of the foot is stimulated.

Grasping

The reflex action by which infants close their fingers around an object placed in their hand.

Genetic Plan

The predetermined genetic information carried by an organism that dictates its developmental processes and inherited traits.

Motor Development

The progression of muscle coordination and movement abilities in individuals, especially during the early years of life.