What does research tell us about the impact of Ricardian equivalence effects on the economy?
A)There is no evidence of any impact of Ricardian equivalence effects.
B)Ricardian equivalence effects have a huge impact on aggregate demand.
C)There is a very small impact on both aggregate demand and aggregate supply.
D)Ricardian equivalence effects may exist, but their magnitudes are unclear.

Question

Quizplus · Accepted Answer

Research suggests that Ricardian equivalence effects may exist, but their magnitudes are unclear. Some studies found evidence of small impacts on both aggregate demand and aggregate supply, while others found no impact at all. Overall, the empirical evidence is inconclusive.

What Does Research Tell Us About the Impact of Ricardian