Question 2:

A tax cut financed by the sale of government consols to the general public has no effect on aggregate wealth because

1. the public has to pay out in future taxes everything it receives in future interest.

2. the present value of the future taxes necessary to pay the future interest equals the tax cut.

3. the amount of real resources the government has to take from the private sector is unaffected.

4. all of the above are true.

Choose the correct option.