what-is-the-effect-of-household-and-firm-debt-accumulation-during-the-expansion-

Question

What is the effect of household and firm debt accumulation during the expansion phase on future spending?

Accepted Answer

It leads to reduced spending as debt repayment becomes necessary.

Answer

It leads to stable spending as debt levels remain constant.

Answer

It leads to increased spending as more credit becomes available.

Answer

It has no effect on spending.