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
What is a bank savings account?
solmaris [256]
 A bank savings account is one simplest type of bank account. It allows you to keep your money safely while earning through interest per month. Money in a savings account is useful for emergencies since they are insured. You also get a card which enables you to withdraw or deposit money into your account. Parent's usually take this type of account for their children for future purposes.
6 0
3 years ago
Brian is responsible for the promotions and public relations of his firm, which produces rubber tires. a recent development in t
brilliants [131]

Answer:

Not newsworthy.

Explanation:

The news is not worth publishing because this is not something that excites the public or catches their attention.

When you are in public relations and you need to advertise and promote a company and it's products, the idea is to capture the imagination of your target audience.

In this example, the news proposal will rightly be rejected because it does not seem to serve any of these purposes.

8 0
3 years ago
Suppose that in your first year of college you spend $3,700.00 more than you earn. In your second year, your expenses increase a
Artist 52 [7]

The deficit in my third year of college is $600.

Deficit is the amount by which expenditures exceed income. Deficits increases the level of debt because deficit spending has to be funded through borrowing.

Deficit in the third year of college = gap in the third year - gap in the second year

$4,800 -  $4,200 = $600

To learn more, please check: brainly.com/question/1800332

5 0
2 years ago
Insurance can help you:
Ede4ka [16]
The answer is B. Financially protect against unexpected accidents
3 0
2 years ago
Read 2 more answers
What are colonias? mexican factories that have high death rates due to poor working conditions. rural, unincorporated slums on t
garri49 [273]
Unincorporated slums on the texas side of the border that have substandard housing
6 0
3 years ago
Other questions:
  • Abercrombie & Fitch is developing a program to get to know its customers. Which of the following is not a reason why A&F
    15·1 answer
  • Oscar has negotiated a lease for his sporting goods store in which he is required to pay $2,500 per month in rent. Oscar pays hi
    11·1 answer
  • One of the eight primary marketing-related reasons for new-product failure is __________.
    5·1 answer
  • In a round-robin tournament, every two distinct players play against each other just once. For a round-robin tournament with no
    15·1 answer
  • The final step in the decision-making process requires that mangers: a.select from a set of potential alternatives. b.identify t
    8·1 answer
  • Michael is a senior in high school and wants to major in a business-related class when he goes to college. Michael plans to sele
    6·1 answer
  • Garcia company has 10,000 units of its product that were produced last year at a total cost of $150,000. the units were damaged
    8·1 answer
  • ____ allow a company to monitor whether salespeople are engaging in tasks such as calling on new accounts, collecting past-due a
    7·1 answer
  • A career path that involves horizontal movement within or across organizations is referred to as a(n) _____.
    15·1 answer
  • If the money multiplier is 3 and the Fed wants to increase the money supply by $900,000, it could Group of answer choices
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!