In the Keynesian model, the principal determinant of saving is
A) interest rates.
B) income.
C) tax rates.
D) investment.

Question

Quizplus · Accepted Answer

In the Keynesian model, the principal determinant of saving is income. As income increases, people are able to save more since they have more disposable income. Conversely, when income decreases, people save less. Interest rates, tax rates, and investment all play a role in determining saving behavior in the Keynesian model, but they are not the primary determinant.

In the Keynesian Model, the Principal Determinant of Saving Is