How is private consumption today affected

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Reference no: EM13192006

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?

Reference no: EM13192006

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