What does Ricardian equivalence imply about the relative size of the e

What does Ricardian equivalence imply about the relative size of the expenditure and tax multipliers?

What will be an ideal response?

ANSWER

If Ricardian equivalence holds, the tax multiplier is zero. The expenditure multiplier is zero, as well, since the decrease in government saving is matched by an increase in private saving. If, however, the increase in government spending is believed to contribute to future output, the expenditure multiplier may be greater than zero, and some private investment would be crowded out.