An increase in expected future output while holding today's output constant would
A)increase today's desired consumption and increase desired national saving.
B)increase today's desired consumption and decrease desired national saving.
C)decrease today's desired consumption and increase desired national saving.
D)decrease today's desired consumption and decrease desired national saving.

Question

Quizplus · Accepted Answer

An increase in expected future output raises expected future income, leading individuals to increase their consumption today. This increase in consumption reduces the amount of income available for saving, thus decreasing desired national saving.

An Increase in Expected Future Output While Holding Today's Output