Distorting taxes can invalidate Ricardian equivalence because
A) they confuse consumers about the need for government to repay its debt.
B) alternative ways of collecting the same tax revenue produce different amounts of lost welfare.
C) they are inferior to lump-sum taxes.
D) they are more popular, politically, than lump-sum taxes.
B
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An increase in income produces a parallel, outward shift in the budget line.
Answer the following statement true (T) or false (F)
Which of the following is NOT considered to be a goal of monetary policy?
A) fair wages B) high employment C) economic growth D) price stability
When graphing a worker's indifference curves in Probability of Injury (x-axis) versus Wage (y-axis) space, Al's indifference curves are steeper than Pete's indifference curve. In this case,
A. both are risk neutral. B. Al is more risk loving than Pete. C. Al will end up receiving a higher wage than Pete. D. Al requires a greater wage increase than Pete in order to willingly take on more risk. E. Al will only accept a job if it offers no risk of injury.
"The government should eliminate income inequality" is an example of
A. a positive statement. B. a normative statement. C. a realistic argument. D. a factual statement.