Explain the extent you agree with this statement: Ricardian equivalence shows that government deficits do not...

 

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Explain the extent you agree with this statement: Ricardian equivalence shows that government deficits do not matter. 2. Explain the logical error in this statement: Government spending financed by issuing bonds will not decrease desired consumption because bonds are simply debt obligations we owe to ourselves. 3. Politicians often talk about how tax cuts will stimulate consumption. Discuss why this claim is incomplete. 4. List the assumptions of the Ricardian Equivalence theorem. 5. Graphically analyze an increase in G+ in an endowment economy. Clearly explain the economic intuition. 6. Graphically analyze an increase in G++1 in an endowment economy. Clearly explain the economic intuition. Explain the extent you agree with this statement: Ricardian equivalence shows that government deficits do not matter. 2. Explain the logical error in this statement: Government spending financed by issuing bonds will not decrease desired consumption because bonds are simply debt obligations we owe to ourselves. 3. Politicians often talk about how tax cuts will stimulate consumption. Discuss why this claim is incomplete. 4. List the assumptions of the Ricardian Equivalence theorem. 5. Graphically analyze an increase in G+ in an endowment economy. Clearly explain the economic intuition. 6. Graphically analyze an increase in G++1 in an endowment economy. Clearly explain the economic intuition.

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1 The statement that Ricardian equivalence shows that government deficits do not matter is partially true but also somewhat misleading Ricardian equivalence theory posits that changes in government bo... View the full answer