If Households Save $0

question 45

Multiple Choice

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.

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Definitions:

Incorporator

The individual or entity responsible for filing the formal documents needed to legally form a corporation.

Subchapter S

A section of the United States tax code that allows for a corporation's income to be taxed directly to the shareholders, thus avoiding double taxation.

Internal Revenue Code

The statutory collection of domestic tax laws that govern federal tax administration in the United States.

Shareholder Level

Refers to the status or category of ownership in a corporation, where individuals or entities own shares representing a portion of the company.