Suppose when real disposable income is $5,000,planned real consumption is $4,000 and planned real saving is $1,000.When real disposable income increases to $6,000,planned real saving increases by $500.The new planned real consumption expenditures is

Question

Quizplus · Accepted Answer

When real disposable income increases from $5,000 to $6,000, planned real saving increases by $500, which means the new planned real saving is $1,500.

Therefore, the new planned real consumption expenditures would be:

Planned real consumption = Real disposable income - Planned real saving
Planned real consumption = $6,000 - $1,500
Planned real consumption = $4,500

Thus, the correct answer is option B.

Suppose When Real Disposable Income Is $5,000,planned Real Consumption Is