The Ricardian equivalence proposition states that an increase in the deficit causes
A) consumption to decrease.
B) savings to decrease.
C) investment to decrease.
D) all of the above
E) none of the above
E
You might also like to view...
A firm's opportunity costs ________
A) equal the costs of resources it buys from others in the market B) include the cost of using resources owned by the firm C) increase when economies of scope exist D) do not include any opportunity costs for resources the owner suppliers
Suppose that there is a positive aggregate demand shock and the central bank commits to an inflation rate target. If the commitment is credible, then
A) the public's expected inflation will remain unchanged. B) the short-run aggregate supply curve will not shift. C) over time inflation will fall back down to the inflation target. D) all of the above. E) both A and B.