The Ricardian Equivalence Proposition Says That

Multiple Choice

The Ricardian equivalence proposition says that

A) a budget deficit caused entirely by a current tax cut has no effect on the economy.
B) a budget deficit caused entirely by an increase in government purchases has no effect on the economy.
C) any budget deficit generated by the government has no effect on the economy.
D) an increase in government spending accompanied by an equivalent increase in taxes has no effect on the economy.