Ricardian equivalence argues that when the government
A) increases taxes and raises its deficit, consumers anticipate that they will face higher taxes later to pay for the resulting government debt, thus people will raise their own private saving to offset the fall in government saving.
B) cuts taxes and decreases its deficit, consumers anticipate that they will face higher taxes later to pay for the resulting government debt, thus people will raise their own private saving to offset the fall in government saving.
C) cuts taxes and raises its surplus, consumers anticipate that they will face higher taxes later to pay for the resulting government debt, thus people will raise their own private saving to offset the fall in government saving.
D) cuts taxes and raises its deficit, consumers anticipate that they will face lower taxes later to pay for the resulting government debt, thus people will raise their own private saving to offset the fall in government saving.
E) cuts taxes and raises its deficit, consumers anticipate that they will face higher taxes later to pay for the resulting government debt, thus people will raise their own private saving to offset the fall in government saving.
E
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A firm is currently producing 100 widgets using 4 units of labor and 12 units of capital. The firm's production function exhibits constant returns to scale. How many units of labor and capital are needed to produce 350 widgets?
A) L = 14; K = 42 B) L = 15; K = 45 C) L = 14; K = 44 D) L = 15; K = 42
For any import quota a country imposes, there exists a tariff the country could have imposed that will have the same impact on producers and consumers.
Answer the following statement true (T) or false (F)