Statement I.As disposable income rises,saving rises at the same rate.
Statement II.At very low levels of disposable income,saving is very high.

Question

Quizplus · Accepted Answer

The statements are contradictory to the general behavior of saving. Statement I suggests that saving rises proportionally with disposable income, while statement II suggests that saving is higher at lower levels of disposable income. In reality, saving tends to increase with an increase in disposable income, but it does not necessarily mean that saving is very high at very low levels of disposable income. Thus, both statements are false.