Keynesian theory is based on the hypothesis that
A) saving is influenced primarily by real current disposable income.
B) saving is influenced primarily by the interest rate.
C) planned savings equal planned investment only at full employment.
D) saving is always equal to savings.

Question

Quizplus · Accepted Answer

Keynesian theory posits that saving is primarily influenced by real current disposable income, rather than the interest rate or the condition of full employment. This theory suggests that as people earn more, they have more disposable income and thus save more, rather than saving behaviors being directly tied to interest rates or employment levels.

Keynesian Theory Is Based on the Hypothesis That