Which of the following have a positive relationship with household saving?
I. the real interest rate
II. disposable income
III. expected future income
A) I and II
B) II only
C) II and III
D) I, II and III

Question

Quizplus · Accepted Answer

The real interest rate and disposable income both have a positive relationship with household saving. Higher real interest rates provide more incentive to save, and higher disposable income increases the capacity to save. Expected future income, however, typically has a negative relationship with current saving, as higher expected future income may lead to less saving today.

Which of the Following Have a Positive Relationship with Household