Define use of fiscal policy to shift AD

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Question: a. In the chapter, we wrote that Tyler does not save and plan according to the theory of Ricardian equivalence but Alex is more of a "Ricardian." In light of this, who probably cuts back their spending the most when taxes temporarily rise: someone like Tyler who is not "Ricardian" or someone like Alex who is?

b. If the U.S. government wants to use fiscal policy to shift AD around easily, which one would the U.S. government prefer to make more copies of: Tyler or Alex?

Reference no: EM131835391

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