Which of the following is NOT usually assumed about the effect of disposable income on aggregate consumer spending?
A)Consumer spending is at a higher level of disposable income.
B)At low levels of disposable income,saving may be negative.
C)Consumption is always less than disposable income.
D)A rise in income leads to a less than proportionate rise in consumption.

Question

Quizplus · Accepted Answer

Consumption can be equal to or greater than disposable income, depending on whether individuals choose to save or borrow. However, it is unlikely to always be less than disposable income. The other options are commonly assumed in the relationship between disposable income and consumer spending.

Which of the Following Is NOT Usually Assumed About the Effect