If disposable income rises by $100 billion, we can expect that consumers will
A)increase their saving by $100 billion.
B)increase their spending by $100 billion.
C)increase their spending by more than $100 billion.
D)increase their spending by less than $100 billion.

Question

Quizplus · Accepted Answer

When disposable income rises, consumers typically divide the extra income between spending and saving, leading to an increase in spending that is less than the total rise in disposable income.

If Disposable Income Rises by $100 Billion, We Can Expect