If households save $0.20 of each additional dollar of increased income and spend the rest, the expenditure multiplier will be

________ choose the quantities of factors of production to hire, and ________ choose the quantities of goods and services to produce

A) Entrepreneurs; firms B) Firms; firms C) Markets; markets D) Factor markets; goods markets E) Firms; households

Economists assume that individuals

A) prefer to live in a society that values fairness above all else. B) will never take actions to help others. C) are rational and respond to incentives. D) behave in unpredictable ways.