If expectations about future disposable income change, there is
A) no change in saving until disposable income actually changes.
B) a decrease in saving if people expect disposable income to increase in the future.
C) an increase in saving if people expect disposable income to increase in the future.
D) a decrease saving if people expect disposable income to decrease in the future.
E) a change in the quantity of loanable funds supplied and a movement along the supply of loanable funds curve.

Question

Quizplus · Accepted Answer

If people expect their disposable income to increase in the future, they may decrease their current saving because they anticipate having more income later to save or spend.

If Expectations About Future Disposable Income Change, There Is