If households set aside funds that are not returned to the spending stream the economy will:
A) Expand
B) Contract
C) Operate at a normal level
D) Do nothing
E) None of the above

Question

Quizplus · Accepted Answer

When households set aside funds that are not returned to the spending stream, it means there is less consumption and investment in the economy. This reduction in spending leads to a contraction in economic activity, as businesses receive less revenue and may cut back on production and employment.

If Households Set Aside Funds That Are Not Returned to the Spending