A Debt-Financed Tax Cut Will ______ Saving in the Traditional

question 68

Multiple Choice

A debt-financed tax cut will ______ saving in the traditional view and ______ saving in the view of Ricardian equivalence.

• A) increase; increase
• B) decrease; decrease
• C) decrease; increase
• D) decrease; not change

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Definitions:

Offeror

The party making the offer.

Accepted

Acknowledged or agreed upon; typically refers to an agreement or proposal that has been agreed to by all parties involved.

Mailbox Rule

A rule providing that an acceptance of an offer takes effect at the time it is communicated via the mode expressly or impliedly authorized by the offeror, rather than at the time it is actually received by the offeror. If acceptance is to be by mail, for example, it becomes effective the moment it is placed in the mailbox.

Offer

A proposal presented by one party to another as a basis for negotiations in a potential contract.