The notion that borrowing to finance a new stadium in a community does not less the tax burden on a community; rather, it simply delays the inevitable, as it substitutes taxes now for taxes later when it repays the debt is known as the__________________________in economics.

Question

Quizplus · Accepted Answer

The Equivalence Theorem states that borrowing to finance a project does not reduce the tax burden on a community, but merely delays taxes until later when the debt is repaid. This principle is widely accepted in the field of public finance and is related to the idea of intertemporal budget constraints. The other options listed are not relevant to this concept.

The Notion That Borrowing to Finance a New Stadium in a Community