When there are credit market frictions, Ricardian equivalence may not hold because
A) consumers cannot understand the implications of the government budget constraint.
B) a tax cut in the present with a future increase in taxes works effectively like a loan.
C) an increase in government saving is matched one-for-one by a decrease in private saving.
D) social security is fully-funded.
B
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According to the infant industry argument for trade protectionism
A) new industries are capable of competing with established rivals. B) trade barriers must be used to protect domestic workers. C) new industries need to be shielded from competition in the early stages of learning by doing. D) tariffs imposed to aid new industries should never be removed.
Oligopoly differs from perfect competition because a single competitive firm's behavior does not affect the behavior of its competitors while the behavior of a single oligopolistic firm does affect the behavior of its rivals
Indicate whether the statement is true or false