An increase in consumer saving for any given level of income will shift the:
A) LM curve upward and to the left.
B) LM curve downward and to the right.
C) IS curve downward and to the left.
D) IS curve upward and to the right.

Question

Quizplus · Accepted Answer

An increase in consumer saving means that there is less consumption spending, which means a decrease in aggregate demand. This will cause a decrease in output and income, shifting the IS curve downward and to the left.

An Increase in Consumer Saving for Any Given Level of Income