The argument that an increase in aggregate demand, as a result of an increase in government purchases, will be offset by increases in savings (less current consumer spending) for future taxes is called:

a. the crowding out effect
b. the Ricardian equivalence theorem
c. the budget deficit effect
d. the budget surplus effect


b

Economics

You might also like to view...

Which of the following can serve as a barrier to entry?

a. legal restrictions b. patents c. control of scarce inputs or resources d. all of the above

Economics

In the spring of 2002, the United States imposed tariffs on imported steel to protect the jobs of American steel workers and protect the production of the American steel industry. Why might this policy not work to increase overall employment in the United States?

Economics

Pat earns $25,000 per year (after taxes), and Pat's spouse, Chris, earns $35,000 (after taxes). They have two pre-school-aged children. Childcare for their children costs $12,000 per year. Given that Chris doesn't want to stay home with the kids, regardless of what Pat does, Pat should stay home with the kids if, and only if, the value of Pat spending more time with the kids is greater than:

A. $13,000 per year. B. $37,000 per year. C. $25,000 per year. D. $12,000 per year.

Economics

Who appoints the chair of the Federal Reserve System?

A. the Senate and Congress B. member banks of the Federal Reserve System C. the Federal Open Market Committee (FOMC) D. the President of the United States

Economics