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    Macroeconomics Study Set 67
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    Exam 9: A Two-Period Model: the Consumptionsavings Decision and Credit Markets
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    Ricardian Equivalence Suggests That the Government Must Pay Off Its
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Ricardian Equivalence Suggests That the Government Must Pay Off Its

Question 50

Question 50

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.

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