One Objection to the Notion of Ricardian Equivalence Is That

question 71

Multiple Choice

One objection to the notion of Ricardian Equivalence is that ________.

• A)households will recognize that a tax cut today will only lead to a tax increase in the future
• B)individuals are short-sighted in their spending decisions
• C)borrowing constraints have largely been eliminated due to financial innovation in the provisioning of consumer credit
• D)households typically save most of the monies received from a tax cut

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Definitions:

Negative Thinking

A pattern of focusing on distressing and unfavorable outcomes or interpreting situations pessimistically.

Classically Conditioned

The process by which an individual learns to associate an initially neutral stimulus with a biologically potent stimulus, producing a reflexive response.

Client-Centered Therapy

An insight therapy that emphasizes providing a supportive emotional climate for clients, who play a major role in determining the pace and direction of their therapy.

Carl Jung

A Swiss psychiatrist and psychoanalyst who founded analytical psychology, known for concepts such as the collective unconscious and archetypes.