The Ricardian Equivalence holds only if
A) the government is altruistic.
B) there are no binding credit constraints.
C) the government runs deficits.
D) the government runs surpluses.
B
You might also like to view...
Marginal revenue product measures the
A. increase in total revenue resulting from the production of one more unit of a product. B. increase in total resource cost resulting from the hire of one extra unit of a resource. C. amount by which the extra production of one more worker increases a firm's total revenue. D. decline in product price that a firm must accept to sell the extra output of one more worker.
It is true of externalities that they
A. are always detrimental. B. are always beneficial. C. arise when all costs, social and private, are included in production cost. D. cause the price system to misallocate resources.
What is tacit collusion?
What will be an ideal response?
"Even if there is a liquidity trap or interest-insensitive investment, a falling price level will increase the real money supply and real wealth, and this impacts consumption"
This is a statement a __________ economist might make as an explanation of why the economy __________ pull itself out of a recession. A) Classical; will B) Classical; may not be able to C) Keynesian; will D) Keynesian; may not be able to