The Argument That Households and Firms View an Increase in Government

question 25

Multiple Choice

The argument that households and firms view an increase in government spending as a sign that taxes will rise in the future and decrease current spending in anticipation of higher future taxes is called:

• A) debt overhang.
• B) the natural rate hypothesis.
• C) supply-side economics.
• D) Ricardian equivalence.

---

Definitions:

IUPAC Name

The methodical labeling of chemical substances as suggested by the International Union of Pure and Applied Chemistry, to guarantee uniformity and clear understanding in the naming of chemicals.

Alkene

Hydrocarbons characterized by the presence of at least one double bond within the molecule, contributing to their chemical reactivity.

1,2-Dimethylcyclohexene

An organic compound derived from cyclohexene, characterized by the presence of two methyl groups attached to the first and second carbon atoms of the cyclohexene ring.

Elements Of Unsaturation

A measure indicating the total number of pi bonds and rings in a molecule, useful in determining molecular structure.