Ricardian equivalence is the proposition that it does not matter ...

[serike]

Ricardian equivalence is the proposition that it does not matter whether government expenditure is financed by taxes or by issuing debt.
 
  Indicate whether the statement is true or false

Question 2

If the opportunity cost of working outside the home decreases then it is likely that ________, assuming all else equal.
 
  A) there will be a rightward shift in the labor supply curve
  B) there will be an upward movement along the labor supply curve
  C) there will be a downward movement along the labor supply curve
  D) there will be a leftward shift in the labor supply curve

[ErinKing]

Answer to Question 1

TRUE

Answer to Question 2

A