Holding all else equal, you would expect the level of economic activity to increase if household:
A) saving were less than taxes.
B) saving plus taxes were more than earned income.
C) saving plus taxes were less than spending from borrowed funds and transfer payments.
D) all of the above.

Question

Quizplus · Accepted Answer

When household saving plus taxes are less than spending from borrowed funds and transfer payments, it indicates that households are spending more money, either by borrowing or through receiving transfers, than they are saving or paying in taxes. This increased spending can stimulate economic activity by increasing demand for goods and services.

Holding All Else Equal, You Would Expect the Level of Economic