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A2: Which of the following situations may invalidate the Ricardian Equivalence proposition? a. There is an election for a new government every 3 years, and
A2: Which of the following situations may invalidate the Ricardian Equivalence proposition? a. There is an election for a new government every 3 years, and there are no rules requiring the government budget has to be balanced. b. Individuals can borrow at an interest that is twice as high as the rate for bank deposits. 0. The country has a system whereby everybody will get exactly the same wage. d. Individuals cannot save or lend, they have to consume every dollar of their after-tax income. Choose your answer: I. a and c only II. b only III. a and b only IV. a, b and d only
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