The Barro-Ricardo equivalence theorem argues that ________ stimulate the economy in the short run.

Question

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The Barro-Ricardo equivalence theorem argues that changes in government expenditure or taxation policy do not have an effect on economic growth in the long run. However, it is believed that tax cuts are not effective in stimulating the economy in the short run as they do not immediately increase consumer spending.

The Barro-Ricardo Equivalence Theorem Argues That ________ Stimulate the Economy