The Barro-Ricardo Equivalence Proposition

Multiple Choice

The Barro-Ricardo equivalence proposition

A) states that debt-financing merely postpones taxation and therefore in many instances is equivalent to current taxation
B) relies on the absence of liquidity constraints and the presence of an operational bequest motive
C) implies that a cut in current taxes that carries with it an implied increase in future taxes will lead to an increase in private saving
D) was not supported by events of the 1980s as taxes were cut, budget deficits increased, and private saving declined
E) all of the above