What does research tell us about the impact of Ricardian equivalence effects on the economy?
A) Ricardian equivalence effects may exist, but their magnitudes are unclear.
B) There is no evidence of any impact of Ricardian equivalence effects.
C) Ricardian equivalence effects have a huge impact on aggregate demand.
D) There is a very small impact on both aggregate demand and aggregate supply.
Question 2
How does a government budget deficit occur?
A) A government's tax revenues exceed its spending.
B) If a nation carries a public debt, it must be running a deficit every year.
C) A government's spending exceeds its tax revenues.
D) A nation earns more on exports than it spends on imports.
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