In the Keynesian model, consumption
A)is positively related to income and saving is negatively related to the stock market.
B)is positively related to income but saving is not systematically related to either income or interest rates.
C)and saving are positively related to the real interest rate.
D)and saving are positively related to income.

Question

Quizplus · Accepted Answer

In the Keynesian model, consumption and saving are both positively related to income. This is because as income increases, consumers are able to afford more goods and services, leading to an increase in consumption. At the same time, as income increases, individuals are also able to save more money. There is no systematic relationship between saving and interest rates in the Keynesian model.

In the Keynesian Model, Consumption