Keynes believed that increased saving:
A) leads to price increases.
B) causes economic growth.
C) causes an economy to grow by providing investment funds.
D) causes consumer spending and total spending to fall.

Question

Quizplus · Accepted Answer

Keynes argued that increased saving reduces consumption because people are spending less money. This reduction in consumption leads to a decrease in overall demand, which can cause a fall in total spending in the economy. This concept is part of his broader theory on how changes in savings and investments affect economic cycles.

Keynes Believed That Increased Saving