The Difference Between Crowding Out and Ricardian Equivalence Is

Multiple Choice

The difference between crowding out and Ricardian equivalence is

A) crowding out is only caused by government purchases; Ricardian equivalence results only from tax cuts
B) crowding out occurs because interest rates rise; under Ricardian equivalence interest rates fall
C) crowding out shifts the IS curve outward; Ricardian equivalence shifts the LM curve inward
D) crowding out makes monetary policy ineffective; Ricardian equivalence makes fiscal policy ineffective
E) crowding out occurs if tax cuts are spent; Ricardian equivalence occurs if they are saved