The Ricardian Equivalence Theorem Implies That

Multiple Choice

The Ricardian equivalence theorem implies that

A) government debt policy must be handled correctly for the economy to prosper.
B) the amounts of government spending are neutral.
C) an increase in government spending has no effect on the economy, as long as there is an equal change in taxes.
D) the timing of taxes collected by the government is neutral.
E) the present value of government spending must be equal to the present value of taxes.