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Economists Who Believe in Sound Finance Would Say That in a Recession

Question 14

Multiple Choice

Economists who believe in sound finance would say that in a recession, the government should:


A) run a budget deficit because the Ricardian equivalence theorem is true both in theory and in practice.
B) run a budget deficit despite the truth of the Ricardian equivalence theorem.
C) maintain a balanced budget because the Ricardian equivalence theorem is true in practice.
D) maintain a balanced budget for political and moral reasons.

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