With reference to the Ricardian equivalence theorem (RET), which of the following statement is correct?
1
It plays an important role in microeconomic theory.
2
It states that consumers are not forward-looking and will base their spending not only on their current income but also on their expected future income.
3
The consumer will not be concerned about future generations
4
David Ricardo was the first one who argued that in the face of high deficits, people save more.