Question

Choose the correct answer :   

 When income increases consumption and saving will _________.

Options

• (a) increase

• (b) decrease

• (c) be constant

• (d) be equal

Answer 1

When income increases consumption and saving will increase.
Explanation:
When the income of a household increases, there capacity to increase their consumption level and the saving level also increases as they now have more money to spend or save.