The Ricardian equivalence theorem states that A) spending on national

The Ricardian equivalence theorem states that

A) spending on national defense is a direct expenditure offset.
B) an increase in government spending by the federal government leads to offsetting reductions in state government spending.
C) government spending financed by taxes is equivalent to government spending financed by borrowing.
D) an increase in government spending financed by higher taxes has no effect on aggregate demand.

ANSWER

C