Dissaving is
A)impossible in the simple Keynesian model.
B)the situation when saving exceeds consumption.
C)the situation when consumption spending exceeds disposable income.
D)the situation when people save smaller and smaller amounts.

Question

Quizplus · Accepted Answer

Dissaving occurs when consumption spending exceeds disposable income, which means people are drawing down their savings or accumulating debt. Option A is incorrect because dissaving is possible in the simple Keynesian model. Option B is incorrect because saving is when income exceeds consumption, whereas dissaving is the opposite. Option D is incorrect because it refers to a trend of declining saving, rather than a specific situation in which people are consuming more than they earn.

Dissaving Is