Explain whether the following statements are true or false?

a. It would be better to replace a sales tax of 10% on good X lasting for one year for a sales tax of 5% on the same good lasting for two yars.

b. There would be no effect on output if the government increases both G and T by 100 units to keep its budget balanced.

c. Automatic stabilizers help balance the government budget over business cycles.

d. A larger government budget deficit will lead to more capital inflow to finance it

especially when there is crowding out.

e. A larger government budget deficit will lead to more capital inflow to finance it

especially under Ricardian equivalence.

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