Author Question: If households save 0.40 of each additional dollar of increased income and spend the rest, the ... (Read 120 times)

Arii_bell · **on:** Jun 30, 2018

If households save 0.40 of each additional dollar of increased income and spend the rest, the expenditure multiplier will be

A) 1.67.
B) 2.5.
C) 4.
D) 6.

Question 2

The difference between the interest rate on loans to households and firms and the interest rate on completely safe assets is known as ________.

A) the fed funds rate
B) the discount rate
C) asymmetric information
D) the credit spread