The Ricardian equivalence theorem states that
A. increases in government spending have a larger impact on real Gross Domestic Product (GDP) than decreases in taxes.
B. an increase in the government budget deficit has no effect on real Gross Domestic Product (GDP) because it only affects the price index.
C. an increase in government spending has no effect on aggregate supply.
D. an increase in the government budget deficit created by a current tax cut has no effect on aggregate demand.
Answer: D
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According to the liquidity premium theory of the term structure
A) because buyers of bonds may prefer bonds of one maturity over another, interest rates on bonds of different maturities do not move together over time. B) the interest rate on long-term bonds will equal an average of short-term interest rates that people expect to occur over the life of the long-term bonds plus a term premium. C) because of the positive term premium, the yield curve will not be observed to be downward sloping. D) the interest rate for each maturity bond is determined by supply and demand for that maturity bond.
In a self-regulating economy, wages will fall and prices will rise when there is an inflationary gap
Indicate whether the statement is true or false
Which one of the following statements about global population is true?
A) Since the 1970's, both population and population growth rates have increased B) Since the 1970's, population growth rates have declined but population has increased C) Since the 1970's, population growth rates have remained constant but population has increased D) Since the 1970's, both population and population growth rates have declined
Which is true?
A. M1 is part of M2, but M2 is not part of M3. B. M1 is not part of M2, but M2 is part of M3. C. M1 is part of M2, and M2 is part of M3. D. None of the choices are true.