If Ricardian equivalence holds, then Group of answer choices a tax cut today financed by tax increases
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Question:
If Ricardian equivalence holds, then
Group of answer choices
- a tax cut today financed by tax increases in the future will stimulate consumption.
- a tax cut today financed by tax increases in the future will contract consumption.
- a tax cut today financed by tax increases in the future will have no effect on the aggregate level of consumption.
- a tax cut today financed by tax increases in the future is the best fiscal policy to undertake in a recession where consumption spending is low.
Related Book For
Macroeconomics
ISBN: 9780132109994
1st Edition
Authors: Glenn Hubbard, Anthony Patrick O'Brien, Matthew P Rafferty
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