According to Ricardian Equivalence theory, a tax cut ________
A) will tend to have little economic effect
B) will tend to reduce the magnitude of the trade-off between inflation and the rate of unemployment
C) can be an effective policy tool in the midst of an economic downturn
D) must be used in conjunction with money supply changes over the course of the business cycle
A
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According to this Application, residents of Greece in 2015 ________ withdrawals of funds from their banks in order to hold ________ cash
A) decreased; less B) increased; more C) increased; less D) decreased; more
Collective bargaining by unions can result in a union wage rate that is ________ the equilibrium real wage rate and creates a ________ of labor
A) below; shortage B) above; shortage C) below; surplus D) above; surplus E) equal to; surplus