Multiple Choice
Distorting taxes can invalidate Ricardian equivalence because
A) they confuse consumers about the need for government to repay its debt.
B) alternative ways of collecting the same tax revenue produce different amounts of lost welfare.
C) they are inferior to lump-sum taxes.
D) they are more popular, politically, than lump-sum taxes.
E) the distortions are only faced by the business sector.
Correct Answer:
Verified
Correct Answer:
Verified
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