Dissaving Occurs When a Household

question 108

Multiple Choice

Dissaving occurs when a household

• A)consumes more than it receives in disposable income.
• B)borrows.
• C)saves more than it spends.
• D)spends more than it saves.
• E)spends less than it receives in disposable income.

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Definitions:

Recession

A period of economic decline across an economy lasting more than a few months, typically visible in GDP, real income, employment, industrial production.

Aggregate Supply

The overall quantity of products and services that companies in a country's economy intend to sell over a set duration.

Wealth Effect

The change in consumer spending and economic behavior that results from a change in perceived wealth, often due to asset price fluctuations.

Real Balances Effect

The change in consumption and savings behavior resulting from an alteration in purchasing power due to inflation or deflation.