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If the Ricardian Equivalence Were True, the Effect of an Increase

Question 23

Multiple Choice

If the Ricardian Equivalence were true, the effect of an increase in government expenditure


A) is effective only if done both by borrowing and by taxation.
B) is the better it is financed by borrowing instead of taxation.
C) is the same regardless on whether it is financed by borrowing or by taxation.
D) is the better it is financed by taxation instead of borrowing.

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