The saving schedule is such that as aggregate income increases by a certain amount, saving
A) increases by the same amount as the increase in income.
B) does not change.
C) increases, but by a smaller amount.
D) increases by an even larger amount.

Question

Quizplus · Accepted Answer

The saving schedule shows an increasing but diminishing marginal propensity to save. This means that as aggregate income increases, saving also increases, but at a decreasing rate. Therefore, option C is the correct answer.

The Saving Schedule Is Such That as Aggregate Income Increases