Other things being equal, an increase in consumption spending implies
A) a decline in saving.
B) a decline in government spending.
C) a higher standard of living in the future.
D) that economic growth will soon increase.

Question

Quizplus · Accepted Answer

If consumption spending increases, it means people are spending more of their disposable income, leaving them with less for saving. Therefore, an increase in consumption spending normally implies a decline in saving.

Other Things Being Equal, an Increase in Consumption Spending Implies