If consumption spending increases by $10 million with no changes in net taxes, then:
A)public saving increases.
B)public saving decreases.
C)private saving increases.
D)private saving decreases.

Question

Quizplus · Accepted Answer

Household saving is a sub-category of private saving. If consumption spending goes up with income constant, then household saving must go down. In this case, private saving goes down by $10 million.

If Consumption Spending Increases by $10 Million with No Changes