At a level of real disposable income of $5,000, suppose consumption is $6,000. Given this information, we know with certainty that saving equals
A) $0.
B) $11,000.
C) $1,000.
D) -$1,000.

Question

Quizplus · Accepted Answer

Since consumption ($6,000) is greater than real disposable income ($5,000), it means that saving is negative, which indicates that people are borrowing or using their savings to finance their consumption. Therefore, the correct answer is D) -$1,000.

At a Level of Real Disposable Income of $5,000, Suppose