When a current generation approves a government program that results in a deficit which is paid for through debt, Ricardian Equivalence states:    a.Deficit financing and pay-go financing are equivalent as subsidies internalize the debt burden to the current generation.   b.Deficit financing and pay-go financing are not equivalent as only taxes internalize the debt burden to the current generation.   c.Deficit financing and pay-go financing are equivalent as bequests internalize the debt burden to the current generation.

Assess the potential macroeconomic consequences of a sustained decline in global population growth rates on long-term interest rates, public pension systems, and international trade balances. Consider the role of demographic trends in shaping fiscal policies and the strategies governments might employ to mitigate adverse effects.

The argument that an increase in aggregate demand, as a result of an increase in government purchases, will be offset by increases in savings (less current consumer spending) for future taxes is called: the crowding out effect. the Ricardian equivalence theorem O the budget deficit effect O the budget surplus effect

Federal government expenditures and receipts for the simple economy of the nation of Topanga are listed in the table below. The government of Topanga would like to reduce the debt-to-GDP ratio, and the Finance Minister of Topanga has proposed the following: "The best way to reduce the debt-to-GOP ratio is to increase GDP, because with a larger GDP, the ratio will have to get smaller, 1 therefore propose that goverment expenditures be increased by 25 percent, personal income taxes be reduced by 25 percent, corporate income taxes be reduced by 25 percent, and contributions for social insurance be reduced by 25 percent. All of these moves will increase GDP by 10 percent by increasing consumer spending, business spending, and government spending by the exact amounts of the increased spending and reduced taxes. Debt GOP Goverment expenditures Goverment transfer payments Interest payment Personal income tax receipts Corporate income tax receipts Contributions for social insurance $20 million…

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Now suppose that the gross national debt initially is equal to $2.5 trillion and the federal government then runs a deficit of $100 billion. What is the new level of gross national debt? If 100 percent of this deficit is financed by the sale of securities to the public, what happens to the level of debt held by the public? What happens to the level of gross deb