According to the Ricardian equivalence theorem, what is the effect of each of the following on output
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According to the Ricardian equivalence theorem, what is the effect of each of the following on output in the economy? Explain your answers.
a. Government pays for an increase in spending by raising taxes.
b. Government pays for an increase in spending by issuing bonds.
c. What is the implication of your answers to a and b?
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a No effect According to the Ricardian equivalence theorem paying for ...View the full answer
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