Ricardian Equivalence Predicts

Multiple Choice

Ricardian equivalence predicts:

A) that if governments cut taxes but not spending, people will not change their behavior.
B) if people perceive current tax cuts to mean higher tax payments in the future, the cuts will have little expansionary effect.
C) the consumers need to feel as though they will not have to pay in the future for current spending to make current tax cuts effective expansionary policy.
D) All of these are true.