According to Keynes, the primary determinant of Amy's saving is
A) the nominal interest rate.
B) the real interest rate.
C) the level of Amy's consumption spending.
D) the level of Amy's real current income.

Question

Quizplus · Accepted Answer

According to Keynes, the primary determinant of saving is the level of real current income. Real current income is the disposable income adjusted for inflation. Therefore, option D is the correct choice. The other options, such as nominal interest rate, real interest rate, and consumption spending, can also influence saving to some extent, but they are not the primary determinants according to Keynesian theory.

According to Keynes, the Primary Determinant of Amy's Saving Is