Suppose a temporary tax cut today is combined with a rise in tax rates on the next generation of taxpayers. This long delay in increasing future taxes would not in itself cause the Ricardian equivalence proposition to fail to accurately predict the effects of the tax cut, unless the

A. parents were far-sighted in their expectations of future tax increases.
B. parents saved the tax cut.
C. parents failed to leave bequests.
D. parents invested the tax cut.


Answer: C

Economics

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