The proposition that an increase in the federal budget deficit caused entirely by a current tax cut has no effect on aggregate demand is called the
A) Ricardian equivalence theorem. B) interest rate effect.
C) indirect effect. D) open-economy effect.
A
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Other things being equal, an increase in consumption spending implies
A) a decline in saving. B) that economic growth will soon increase. C) a higher standard of living in the future. D) a decline in government spending.
Which statement is true of the Battle of the Sexes game?
a. It is a coordination game. b. The mixed-strategy Nash equilibrium provides players with lower expected payoffs than other equilibria. c. The first mover has an advantage in the sequential version. d. All of the above.
Fiscal policy may be used to slow an expansion in order to fight ______.
a. inflation b. deflation c. unemployment d. stagnation
When the housing bubble popped, the effect of the negative demand side shock and the negative supply side shock were the same on:
A. output, causing it to definitely decrease. B. prices, causing them to definitely rise. C. output, causing it to definitely increase. D. prices, causing them to definitely fall.