A decrease in net wealth will _____
A) increase consumption and increase saving.
B) increase saving and decrease consumption.
C) decrease consumption and decrease saving.
D) increase consumption and decrease saving.
E) have no effect on consumption.

Question

Quizplus · Accepted Answer

A decrease in net wealth typically leads to an increase in saving as individuals attempt to rebuild their wealth, and a decrease in consumption as they have less wealth to spend.

A Decrease in Net Wealth Will _____