As real disposable income increases, consumption expenditure and saving .

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Quizplus · Accepted Answer

As real disposable income increases, individuals have more money to spend on consumption, leading to an increase in consumption expenditure. At the same time, they also have more income available to save, leading to an increase in saving. This relationship is known as the income consumption-saving relationship, which shows that as income rises, both consumption and saving increase.

As Real Disposable Income Increases, Consumption Expenditure and Saving