According to the Ricardian equivalence theorem, budget deficits resulting from tax cuts
A. have no effect on aggregate demand.
B. affect only aggregate supply.
C. increase aggregate demand.
D. increase both aggregate demand and aggregate supply.
Answer: A
You might also like to view...
If a customer deposits $10,000 in currency into a checking account, the bank's total reserves ________
A) increase B) do not change C) are greater than 100 percent D) decrease
When your budget line is just tangent to your indifference curve, you are at your best affordable point
Indicate whether the statement is true or false
List two examples of commodity money
What is the most appropriate test to evaluate whether a government-spending program will improve living standards and lead to higher income levels?
A) The value of the output generated by the government-spending program compared to its opportunity cost B) The total number of jobs created by the program C) The reduction in the rate of unemployment as the result of the spending on the program D) The taxes necessary to finance the program compared to the revenues generated by the additional employment created by the program