Assume that we have ricardian equivalence. this implies, Ask an Expert

Economics

Assume that we have Ricardian equivalence. This implies that consumption depends on ex- pected lifetime income and that individuals understand the governmentís intertemporal budget restriction.

B) How is private consumption today affected if there is a temporary reduction in govern- ment consumption in the current period? How is aggregate demand affected?

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M9482051

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