If government spending is held constant and Ricardian equivalence holds,
A) an increase in the government budget deficit is always matched by a reduction in private savings.
B) an increase in government savings is always matched by an increase in the government budget deficit.
C) an increase in government savings is always matched by an equal increase in private savings.
D) an increase in government savings is always matched by an equal reduction in private savings.
D
You might also like to view...
If there is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and consumer surplus plus producer surplus is maximized, then
A) maximum deadweight loss occurs. B) profits are maximized. C) costs are minimized. D) economic efficiency is achieved.
It is often said that if we could get more individuals to study the issues and vote we could have significant change through the ballot box
While true in a technical sense, which of the following statements best explains why this outcome is ¬not likely to occur? a. Individuals have double-peaked preferences and thus cyclical majorities will be prevalent. b. Individuals are rationally ignorant and free ride off of the politically informed. c. Individuals form special interest groups to suppress those attempting to effect change. d. The electoral college stifles grassroots movements at all levels.