If for some reason households become increasingly thrifty, we could show this by:
A)a downshift of the saving schedule.
B)an upshift of the consumption schedule.
C)an upshift of the saving schedule.
D)an increase in the equilibrium GDP.

Question

Quizplus · Accepted Answer

If households become increasingly thrifty, they will save more and consume less. This will result in an upshift of the saving schedule, as more income is saved at each level of income. Conversely, the consumption schedule will downshift, as less income is spent on consumption at each level of income. This will not necessarily lead to an increase in equilibrium GDP, as it depends on the specific circumstances of the economy.

If for Some Reason Households Become Increasingly Thrifty, We Could