The Ricardian equivalence theorem suggests that an increase in the government budget deficit created by a tax cut will
A. decrease real Gross Domestic Product (GDP) in the short run, but increase it in the long run.
B. increase real Gross Domestic Product (GDP) in both the short and long run.
C. increase real Gross Domestic Product (GDP) in the short run, but decrease it in the long run.
D. have no effect on real Gross Domestic Product (GDP) in either the short run or the long run.
Answer: D
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Economists use the government's tax revenue to measure the public benefit from a tax
a. True b. False Indicate whether the statement is true or false
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