Classical economists claim that _____ is the primary determinant of saving, and Keynes claimed that _____ is the primary determinant of saving.
A) the interest rate; income
B) income; the interest rate
C) taxes; government spending
D) GDP; disposable income

Question

Quizplus · Accepted Answer

Classical economists believe that the interest rate is the primary determinant of saving because higher interest rates provide more incentive for people to save rather than spend. On the other hand, Keynes argued that income is the primary determinant of saving, suggesting that people save a portion of their income regardless of the interest rate.

Classical Economists Claim That _____ Is the Primary Determinant of Saving