What are the main reasons (give at least three) that Ricardian equivalence might not hold?
What will be an ideal response?
People may face borrowing constraints, they may be shortsighted, they may fail to leave bequests, or their economic behavior may be affected because taxes aren't lump-sum.
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Transactions costs refer to
A) the cost of transporting goods from one destination to another. B) the raw material cost of production. C) the costs in time and other resources that parties incur in the process of agreeing to and carrying out an exchange of goods or services. D) the implicit costs of production.
If the price level is 100 for 2005 and the price level is 106.5 in 2007, a nominal GDP in 2007 of $15,600 billion would mean that real GDP in 2007 (in 2005 prices) would be closest to
A. $14,751.3 billion. B. $13,971.2 billion. C. $14,647.9 billion. D. $15,600.0 billion.