Which of the following is CORRECT?
A) As disposable income increases, the real interest rate increases.
B) As disposable income decreases, saving decreases.
C) As saving decreases, disposable income increases.
D) As saving increases, investment by households decreases.

Question

Quizplus · Accepted Answer

B) As disposable income decreases, saving decreases. This is because disposable income is the amount of money that households have available for spending and saving after income taxes have been accounted for. Generally, if disposable income decreases, people have less money to save.

Which of the Following Is CORRECT