According to Keynes
A) consumption is directly related to income but saving has no relationship with income.
B) consumption is directly related to income but saving is inversely related to income.
C) both consumption and saving are positively related to real disposable income.
D) consumption is positively related to the interest rate.
C
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In the two-country model of the Monetary Approach, the spot exchange rate is determined by
A) the relative quantities of money supplied and demanded. B) the real money stock in country A vs. country B. C) the nominal incomes in the two countries. D) the ratio of prices in the economies.
Which of the following is not a characteristic of a perfectly competitive market structure?
A) There are a very large number of firms that are small compared to the market. B) All firms sell identical products. C) There are no restrictions to entry by new firms. D) There are restrictions on exit of firms.