Keynes Believed That an Increase in Savings Would

question 173

Multiple Choice

Keynes believed that an increase in savings would:

• A)raise aggregate demand by reducing investment.
• B)raise aggregate demand by increasing consumption.
• C)reduce aggregate demand by reducing investment.
• D)reduce aggregate demand by reducing consumption.

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Definitions:

Certain Income

A guaranteed or fixed amount of earnings that an individual or entity can expect to receive over a specific time period.

Uncertain Income

Income that is not guaranteed or fixed, often subject to fluctuations due to various factors such as employment status, market conditions, or performance.

Marginal Utility

The additional satisfaction or utility that a consumer gains from consuming one more unit of a good or service.

Income

The money received, typically on a regular basis, for work or through investments.