Which of the factors listed below might cause the Ricardian equivalence proposition to be violated?
(a) There may be international capital inflows and outflows.
(b) Consumers may not understand that an increase in government borrowing today is likely to lead to higher future taxes.
(c) There may be constraints on the level of government spending.
(d) There may be constraints on the level of government taxation.
Answer: B
If the answers is incorrect or not given, you can answer the above question in the comment box. If the answers is incorrect or not given, you can answer the above question in the comment box.