Dissaving occurs when
A) households deposit unusually large amounts of money into their savings account.
B) households reduce their planned monthly saving.
C) consumption spending exceeds real disposable income.
D) the average saving rate for the nation unexpectedly falls.

Question

Quizplus · Accepted Answer

Dissaving refers to a situation where consumption spending exceeds real disposable income. In other words, individuals or households are spending more than they are earning, which can lead to a negative saving rate. Option A refers to saving, not dissaving, while option B describes a reduction in planned saving but does not necessarily indicate dissaving. Option D describes a change in the average saving rate for the nation and is not directly related to dissaving by households.

Dissaving Occurs When