If personal saving is -$40 billion and disposable personal income is $430 billion, then personal consumption spending is
A) $40 billion.
B) $390 billion.
C) $410 billion.
D) $470 billion.

Question

Quizplus · Accepted Answer

Personal consumption spending is calculated as disposable personal income minus personal saving. Since personal saving is negative, it means consumption exceeds income by $40 billion. Therefore, $430 billion (income) + $40 billion (negative saving) = $470 billion (consumption).

If Personal Saving Is -$40 Billion and Disposable Personal Income