Induced saving
A)is that part of saving that is inversely related to the interest rate
B)plus autonomous saving equals disposable income
C)is that portion of saving that is directly related to income
D)is less than disposable income at every level of income
E)equals autonomous saving at every income level

Question

Quizplus · Accepted Answer

Induced saving is directly related to income, as individuals tend to save a larger proportion of their income as it increases. Autonomoussaving, on the other hand, is not influenced by changes in income and reflects the minimum level of saving that households and firms engage in regardless of their income or interest rates.

Induced Saving