If Ricardian equivalence is true, and the government raises taxes (holding spending constant), how does the average person’s behavior change? In other words, how does he or she react to a tax increase?

If Ricardian equivalence is true, and the government raises taxes (holding spending constant), how does the average person’s behavior change? In other words, how does he or she react to a tax increase?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If Ricardian equivalence is true, and the government raises taxes
(holding spending constant), how does the average person’s behavior
change? In other words, how does he or she react to a tax increase?

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