Refer to the given saving schedule. Dissaving occurs when disposable income is
A) equal to level 2.
B) less than level 2.
C) greater than level 2.
D) equal to level 3.

Question

Refer to the given saving schedule. Dissaving occurs when disposable income is
A) equal to level 2. 
B) less than level 2. 
C) greater than level 2. 
D) equal to level 3.

Quizplus · Accepted Answer

Dissaving occurs when disposable income is less than level 2. This is because at this point, consumption exceeds disposable income and savings become negative, indicating the use of past savings or borrowing to finance consumption.

Refer to the Given Saving Schedule