Multiple Choice
Ricardian equivalence suggests that the government must pay off its debt by
A) reducing government spending in the future.
B) increasing the real interest rate.
C) transferring surpluses to the debt.
D) reducing private savings in the future.
E) increasing taxes in the future.
Correct Answer:

Verified
Correct Answer:
Verified
Q45: Distorting taxes can invalidate Ricardian equivalence because<br>A)the
Q46: Bonds are assumed to trade directly<br>A)through financial
Q47: The optimal consumption bundle is where<br>A)the marginal
Q48: A one-unit decrease in current income, and
Q49: When different consumers pay different amounts of
Q51: An important reason why Ricardian equivalence may
Q52: For a lender, an increase in the
Q53: Aggregate consumption is<br>A)more variable than savings.<br>B)more volatile
Q54: Intertemporal decisions involve economic decisions<br>A)that ignore concerns
Q55: Consumption smoothing refers to<br>A)the tendency of consumers