Question : According to David Ricardo, during a high deficit situation taxation and borrowing are ______means of spending.
Option 1: prudent
Option 2: differentiated
Option 3: equivalent
Option 4: subsidised
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Correct Answer: equivalent
Solution : The correct answer is equivalent.
According to the economic theory known as Ricardian equivalence, increasing government deficit spending won't increase demand as intended. In some cases, according to Ricardo, even the financial effects of these can be compared because taxpayers are aware that, even in the case of deficit spending, their taxes will eventually increase to pay off the national debt.
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Question : Who propounded the Innovation theory of profits ?
Option 1: J .A. Schumpeter
Option 2: P .A. Samuelson
Option 3: Alfred Marshall
Option 4: David Ricardo
Question : J. B. Say's Law of Market was not accepted by:
Option 1: Adam Smith
Option 2: Marshall
Option 3: Malthus
Question : Revenue expenditure minus revenue receipts is____________.
Option 1: revenue deficit
Option 2: budget deficit
Option 3: always negative
Option 4: always positive
Question : Which is not a measure undertaken by the government to check inflation?
Option 1: An increase in consumption
Option 2: An increase in production
Option 3: Reduction in deficit financing
Option 4: Taxation measures
Question : Usually, the reduction in the taxes will have ____________ multiplier effect compared to an increase in government spending on aggregate demand.
Option 1: no
Option 2: smaller
Option 3: higher
Option 4: equivalent
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