The Ricardian Equivalence Proposition Suggests That a Tax Increase That

question 70

Multiple Choice

The Ricardian Equivalence proposition suggests that a tax increase that causes a budget surplus will

• A)cause an increase in output.
• B)cause no change in output.
• C)cause a reduction in output.
• D)a reduction in consumption.

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Definitions:

Referent Power

Referent Power is a form of influence based on the charisma or likeability of an individual, leading others to emulate or follow them voluntarily.

Reward Power

The ability to influence others' behavior through the offering of positive incentives or benefits.

Legitimate Power

refers to the authority that an individual or entity has, recognized as rightful by those who are governed or led.

Public Organizations

Entities that operate within the government framework, providing services to the public and funded by tax dollars and other government revenues.