Refer to the given saving schedule. As income falls from level 3 to level 2, the amount of
A) dissaving decreases.
B) dissaving increases.
C) saving decreases.
D) saving increases.

Question

Refer to the given saving schedule. As income falls from level 3 to level 2, the amount of
A) dissaving decreases. 
B) dissaving increases. 
C) saving decreases. 
D) saving increases.

Quizplus · Accepted Answer

As income falls from level 3 to level 2, the saving decreases. This is because as income decreases, people tend to spend more of their income rather than saving it. Thus, the level of saving decreases with a fall in income.

Refer to the Given Saving Schedule