Which Theory States That a Tax Cut Does NOT Affect

question 60

Multiple Choice

Which theory states that a tax cut does NOT affect aggregate demand because people save all they gain from the tax cut?

• A) quantity theory of money
• B) inefficient market hypothesis
• C) purchasing power parity
• D) Ricardian equivalence

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Definitions:

Retrieves

The process of getting back information or objects that were stored or kept away.

Alters

Alternate identities or personalities within an individual, often associated with dissociative identity disorder (DID), where a person's identity is fragmented into two or more distinct states.

Retention

The ability to hold, preserve, and recall information or experiences over time.

Period Of Time

A specific duration marked by a beginning and an end.