The aggregate consumption function is based on the assumption that as real disposable income rises, aggregate desired consumption
A)will fall and desired saving will rise.
B)will rise and desired saving will fall.
C)remains constant and desired saving will rise.
D)and desired saving will both rise.
E)remains constant and desired saving will fall.

Question

Quizplus · Accepted Answer

The aggregate consumption function assumes that as real disposable income rises, both aggregate desired consumption and desired saving will increase, as people tend to consume more and save more when they have higher disposable income.

The Aggregate Consumption Function Is Based on the Assumption That