Which of the following is correct?
A) As saving decreases, disposable income increases.
B) As disposable income increases, the real interest rate increases.
C) As disposable income decreases, saving decreases.
D) As saving increases, investment by households decreases.

Question

Quizplus · Accepted Answer

The relationship between disposable income and saving is directly proportional. If disposable income decreases, saving also decreases as people have less money to save. Conversely, if disposable income increases, saving also increases as people have more money to save.

Which of the Following Is Correct