Economists assume that households and firms share two important characteristics. One of these ...

Economists assume that households and firms share two important characteristics. One of these characteristics is that
 
  A) they smooth spending during recessions and expansions.
  B) they act rationally to meet their objectives.
  C) they only consider the present when making decisions.
  D) the growth rate in spending by each is equally volatile.

Question 2

Often, the farther real GDP is below potential GDP,
 
  A) the smaller the multiplier effect.
  B) the larger the multiplier effect.
  C) the less effective is the multiplier effect.
  D) the less meaningful is the multiplier effect.