According to the new classical view,if people appropriately realize that an increase in government debt implies higher future taxes,they will
A) save less since the substitution of debt for taxes makes them wealthier.
B) increase their consumption since the substitution of debt for taxes makes them wealthier.
C) save more now to meet the future tax liability implied by the increase in debt.
D) alter neither their saving nor their consumption rate.
Correct Answer:
Verified
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