What are the main reasons (give at least three) that Ricardian equivalence might not hold?
What will be an ideal response?
People may face borrowing constraints, they may be shortsighted, they may fail to leave bequests, or their economic behavior may be affected because taxes aren't lump-sum.
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Paper currency that could be redeemed for a specific quantity of an underlying commodity is called
A) commodity money. B) fiat money. C) representative commodity money. D) Federal Reserve cash.
In our study of monopoly, we found that monopolists can increase profit by segmenting the market and price discriminating (under third degree price discrimination). Now suppose a firm is producing an excludable local public good. Can you justify a form of such market segmentation and price discrimination as efficient?
What will be an ideal response?
Based on the chart for federal government expenditures, what are the three highest expenditure categories?
a. transfer payments, interest payments, and other expenditures
b. transfer payments, defense spending, and grants to state and local governments
c. defense spending , grants to state and local governments, and other expenditures
d. interest payments, grants to state and local governments, and other expenditures
In a partnership
A) each partner's liability is limited to their investment in the company. B) profits are taxed at both the corporate rate and the personal income tax rate. C) upon the death of a partner it may be necessary to sell the business. D) there is a separation of ownership and management like in a corporation.