#1 ) The Ricardian equivalence theorem states that

a.) an increase in government spending has no effect on

Question

#1.) The Ricardian equivalence theorem states that

a.) an increase in government spending has no effect on

aggregate supply.

b.) increases in government spending have a larger impact on real Gross Domestic Product (GDP) than decreases in taxes.

c.) an increase in the government budget deficit created by a current tax cut has no effect on aggregate demand.

d.) an increase in the government budget deficit has no effect on real Gross Domestic Product (GDP) because it only affects the price index.

#2.) If the economy is experiencing an inflationary gap and the government wants to accelerate the adjustment to the long-run equilibrium, it should