If Ricardian Equivalence Holds, One Way to Get the Expansionary

question 94

Multiple Choice

If Ricardian equivalence holds, one way to get the expansionary effects of a tax cut to occur is:

• A) pair it with reduced government spending.
• B) pair it with increased government spending.
• C) to run a campaign inspiring people to buy goods made in the United States.
• D) None of these will create the expansionary effects of a tax cut.

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