In a simple,closed economy (no government or foreign sector),if disposable income increases by $500 and $450 is consumed,$50 is saved.

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Quizplus · Accepted Answer

This is because disposable income is either consumed or saved. In this case, $450 was consumed and $50 was saved out of the $500 increase in disposable income. The fact that some of the disposable income was saved confirms that it was not entirely consumed.

In a Simple,closed Economy (No Government or Foreign Sector),if Disposable