The theoretical proposition that government deficits do not affect the level of output because individuals realize that they have to pay the deficits in the future and therefore increase their savings is called: the Ricardian equivalence theorem purchasing power parity sound finance functional finance
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Step 1: The theoretical proposition that government deficits do not affect the level of output because individuals realize that they have to pay the deficits in the future and therefore increase their savings is called the Ricardian equivalence theorem. Show more…
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