Question

Families increase savings to offset the increased government dissaving. Who among the following has given the above mentioned theory?

• A. BR Ambedkar
• B. Takeshi Amemiya
• C. Walter Adams
• D. David Ricardo

Answer 1

Answer:

D. David Ricardo

• The theory that families increase savings to offset increased government dissaving is known as Ricardian Equivalence, and it's associated with the economist David Ricardo.

• The first step in understanding economic rent is forgetting what you currently think of as rent.

• Economic rent has nothing to do with the more traditional definition of rent, which is a payment in exchange for the use of something for a set period of time.

• Economic rent is what the owner pays for additional services above what is expected. International free trade relies heavily on the idea of comparative advantage.

• According to David Ricardo's theory of international trade, which is partly based on Smith's concept of labour specialisation, countries should concentrate on doing whatever they can do more efficiently and then exchange their surplus for items they can't produce efficiently