Empirical evidence shows that in response to the 2008 and 2009 tax rebates, consumers spent 50% to 90% of the amounts they received. This suggests that

A. Okun's law holds.
B. budget constraints are not binding.
C. Ricardian equivalence does not hold.
D. people do not understand economics.


Answer: C

Economics

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If real income rises faster than absorption during a time of economic expansion, then

A) the nation will experience a current account surplus. B) the nation will experience a current account deficit. C) national production will increase until absorption and income are balanced. D) the nation's imports must rise relative to its exports.

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Economic growth can best be portrayed as a:

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Economics