Suppose the government cuts taxes by $300 million dollars this year and must pay off its debt next year by increasing taxes by $300 million
According to Ricardian equivalence, consumption spending will ________ this year and ________ next year, all else equal. A) increase by $300 million; decrease by $300 million
B) increase by $150 million; decrease by $150 million
C) increase by $300 million; not change
D) not change; not change
D
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Assume that as the firms in a perfectly competitive industry expand output, the prices of productive inputs increase
All else constant, this would cause the individual firms' marginal cost curves to ________ and the market supply curve to become ________. A) shift down; flatter B) shift down; steeper C) shift up; flatter D) shift up; steeper
A currency swap can
A) make foreign goods more expensive in the domestic market. B) make the foreign exchange rate more volatile over time. C) reduce foreign exchange risk. D) make domestic goods more expensive in foreign countries.