As disposable income rises:
A) consumption falls, but not by as much as the disposable income rises.
B) the average propensity to consume increases.
C) saving falls as a percentage of disposable income.
D) the average propensity to consume remains unchanged.
E) saving rises as a percentage of disposable income.

Question

Quizplus · Accepted Answer

As disposable income rises, people tend to save a larger portion of their income, leading to an increase in saving as a percentage of disposable income.

As Disposable Income Rises