According to Ricardian Equivalence, an Increase in Government Expenditure Without

Multiple Choice

According to Ricardian equivalence, an increase in government expenditure without a proportional tax increase implies that households:

A) expect future tax increases and will reduce spending today
B) expect higher current income and will increase spending today
C) expect future tax decreases and will reduce spending today
D) expect their income to remain constant and will hold spending constant
E) do not change their spending patterns