The Barro-Ricardo Equivalence Theorem Argues That ________ Stimulate the Economy

question 38

Multiple Choice

The Barro-Ricardo equivalence theorem argues that ________ stimulate the economy in the short run.

• A) government expenditure increases will
• B) government expenditure increases will not
• C) tax cuts will
• D) tax cuts will not

---

Definitions:

Need for Affiliation

An individual's desire to form connections and foster positive relationships with others.

Alderfer's

Relates to Alderfer's ERG Theory, a model in psychology that categorizes human needs into three groups: Existence, Relatedness, and Growth needs.

Existence Need

In the context of motivation theories, particularly ERG theory, existence needs refer to basic physical and material well-being requirements such as food, safety, and shelter.

Growth

An increase in the size, number, value, or strength of something over time.