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

Question

Quizplus · Accepted Answer

If household spending from transfer payments and borrowed funds is less than saving plus taxes, it implies that more money is being saved or taxed than spent, leading to a decrease in economic activity.

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