If expectations about future income change, there is
A)an increase in saving if people expect income to increase in the future.
B)a decrease saving if people expect income to decrease in the future.
C)a change in the quantity of loanable funds supplied and a movement along the supply of loanable funds curve.
D)no change in saving until income actually changes.
E)a decrease in saving if people expect income to increase in the future.

Question

Quizplus · Accepted Answer

If people expect their income to increase in the future, they may feel more financially secure and thus reduce their current savings, anticipating that they will have more income to rely on later.

If Expectations About Future Income Change, There Is