Which of the following influences household saving?
I. The real interest rate.
II. Disposable income.
III. Expected future income.
A) I, II, and III
B) I only
C) I and II
D) I and III

Question

Quizplus · Accepted Answer

All three factors listed (real interest rate, disposable income, and expected future income) can influence household saving. The real interest rate affects the return on savings, so higher rates may encourage more saving. Disposable income refers to the amount of income households have available after paying taxes and necessary expenses, and higher levels of disposable income could lead to more saving. Expected future income can also influence saving behavior, as households may save more if they expect their income to decrease in the future, or may save less if they expect their income to increase. Therefore, all three factors can impact household saving.

Which of the Following Influences Household Saving