試題詳解

6. (5%) Regard to the Ricardian Equivaience Theorem, which of the following statement is incorrect?
(A) It implies that a tax cut is not a free lunch.
(B) It holds by assuming a perfect credit market.
(C) It implies that government saving declines but private saving goes up when there is a tax cut in the current period.
(D) it still holds even if people could pass away in the future period.