The saving function assumes that personal saving depends primarily on
A) interest rates.
B) the amount of investment.
C) the difference between the average and marginal propensities to consume.
D) disposable income.
E) the unemployment rate.

Question

Quizplus · Accepted Answer

The saving function assumes that personal saving depends primarily on disposable income, as higher incomes generally lead to higher levels of saving. Interest rates, investment, the difference between the average and marginal propensities to consume, and the unemployment rate may all have an influence on personal saving, but they are not the primary factors on which the saving function is based.

The Saving Function Assumes That Personal Saving Depends Primarily on