Question: Can you please explain why a) and b) are FALSE? A15. In the multiplier model, a A higher share of credit-constrained households increases the impact
Can you please explain why a) and b) are FALSE?

A15. In the multiplier model, a A higher share of credit-constrained households increases the impact on output of any change in autonomous aggregate demand. F The paradox of thrift means that adopting a policy of austerity in a recession (by reducing government expenditure) will worsen the public finances as compared with a policy that keeps government expenditure unchanged. T F (c) A rise in household wealth relative to target will ceteris paribus shift the AD curve upwards and raise output. T
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