Ricardian Equivalence

question 104

Multiple Choice

Ricardian equivalence:

• A) is the decrease in private spending that occurs when government increases spending.
• B) occurs when people see that lower taxes today means higher taxes in the future,so instead of spending their tax cut they save it to pay future taxes.
• C) is federal government policy on taxes,spending,and borrowing that is designed to influence business fluctuations.
• D) is central bank policy on the monetary base,interest rates,and bank reserves that is designed to influence business fluctuations.