Ricardian equivalence argues that when the government cuts taxes and raises its deficit,
A) consumers anticipate that they will face lower taxes later to pay for the resulting government debt.
B) consumers anticipate that they will higher services from the government.
C) consumers anticipate that they will face higher taxes later to pay for the resulting government debt.
D) consumers anticipate it will affect their future taxes, in general in the direction of lowering future taxes.
E) consumers anticipate that the low tax rates will continue.
C
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When someone in a country buys an asset abroad, the transaction is recorded
A) in the current account. B) in the official settlements balance. C) in the financial account as a capital inflow. D) in the financial account as a capital outflow.
A person's real wage will fall if the
A) nominal wage falls. B) price level rises. C) nominal wage rises. D) price level falls. E) a and b