1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Ostrovityanka [42]
3 years ago
14

If the Ricardian equivalence theorem LOADING... is not​ relevant, then an​ income-tax-rate cut A. will result in a multiple time

s higher increase in equilibrium real GDP in the long​ run; however, a​ tax-rate reduction will increase the​ automatic-stabilizer properties of the tax​ system, so equilibrium real GDP would be more stable. B. will result in a multiple times higher decrease in equilibrium real GDP in the long​ run, however; a​ tax-rate reduction will reduce the​ automatic-stabilizer properties of the tax​ system, so equilibrium real GDP would be more stable. C. will result in a multiple times higher increase in equilibrium real GDP in the short​ run; however, a​ tax-rate reduction will reduce the​ automatic-stabilizer properties of the tax​ system, so equilibrium real GDP would be less stable. D. will result in a multiple times higher decrease in equilibrium real GDP in the short​ run; however, a​ tax-rate reduction will increase the​ automatic-stabilizer properties of the tax​ system, so equilibrium real GDP would be less stable.
Business
1 answer:
LenKa [72]3 years ago
6 0

Answer:

The correct answer is D. will result in a multiple times higher decrease in equilibrium real GDP in the short​ run; however, a​ tax-rate reduction will increase the​ automatic-stabilizer properties of the tax​ system, so equilibrium real GDP would be less stable.

Explanation:

Ricardian Equivalence is an economic theory that suggests that when a government increases expenses financed with debt to try to stimulate demand, demand does not really undergo any change.

This is because increases in the public deficit will lead to higher taxes in the future. To keep their consumption pattern stable, taxpayers will reduce consumption and increase their savings in order to offset the cost of this future tax increase.

If taxpayers reduce their consumption and increase their savings by the same amount as the debt to be returned by the government, there is no effect on aggregate demand.

The fundamental concept of Ricardian equivalence is that it does not matter which method the government chooses to increase spending, whether by issuing public debt or through taxes (applying an expansive fiscal policy), the result will be the same and demand will remain unchanged.

You might be interested in
Which of the following factors has the LEAST influence on an individual’s core belief system? a. Physical appearance c. Religiou
loris [4]

Answer:

a. Physical appearance

Explanation:

The Physical appearance of a person is as a result of the genetic make up of the individual. This factor barely has an influence on an individual’s core belief system.

Religious background is a key element of individual’s core belief system as it forms the basis of one's belief about God, life, fate and destiny.

Family upbringing forms the basis of one's belief as the individual grows. The influence of the members of a family forms a part of the individual's core belief.

Life experiences as well forms a key part of our belief system and the same goes for personality.

3 0
3 years ago
Isabelle, customer relations manager at future tools, inc., must inform her clients of a 25 percent price increase for all servi
Art [367]
In doing so, she should be sure to emphasize clients' options for saving money, such as bundling services or choosing less <span>comprehensive plans.
Telling this options will reduce the chance of that customer to stop using the service and move out to another competitor. Providing saving money options will give a reward for customers who are loyal to the company and make them feel valued.</span>
7 0
3 years ago
HELP ASAP Many employees quit working for Burger Bliss after six months, and the
Alja [10]

Answer:

D. The company tells employees that their work matters.

Explanation:

Every employer desires to attract and retain the best workers.  Employees are more likely to stay in an organization for longer if they feel appreciated. Other than monetary compensation, employees feel motivated to work when their efforts and contributions are recognized.

Burger Bliss should let their employees feel important. They should communicate to employees both in words and actions how much the company values their input.

8 0
3 years ago
_____ is the paid integration of branded products in movies and on television.
PolarNik [594]
D) Product Placement
6 0
3 years ago
Read 2 more answers
Which two advantages do home buyers have over renters?
Snowcat [4.5K]
Answers A and E seem correct. B makes no sense. C makes no sense. and my renters insurance was very cheap vs property insurance.
5 0
3 years ago
Read 2 more answers
Other questions:
  • There are 10 firms in an industry, and each firm has a market share of 10 percent. the industry's herfindahl index is
    13·1 answer
  • The ethical question is whether apple ought to contract (through suppliers) fifteen-year-olds to work on factory floors. is the
    13·1 answer
  • A statewide alliance of independent hospitals has formed in order to do group purchasing of medical supplies. Group purchasing a
    7·1 answer
  • The discovery of a large oil deposit off a nation's shores would be what type if economic variable?
    13·2 answers
  • Your grandmother has promised to give you $5,000 when you graduate from college. She is expecting you to graduate two years from
    8·1 answer
  • In the trade-off theory, debt levels chosen to balance interest tax shield against the costs of financial distress imply:_______
    6·1 answer
  • What do banks usually offer in order to encourage you to put money in a savings account?
    10·1 answer
  • If the demand for a good falls when income falls, then the good is called a. a normal good. b. an ordinary good. c. a regular go
    13·1 answer
  • Sales reported on the income statement were $690,000. The accounts receivable balance declined $39,000 over the year. Determine
    12·1 answer
  • True or false: GAAP require end-of-period adjustments for the estimated bad debts in the period of the credit sale even though t
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!