Which of the Following Statements Is True

question 100

Multiple Choice

Which of the following statements is true?

• A) Higher interest rates typically encourage more savings.
• B) The savings of households are independent of tax rates.
• C) Households that expect an increase in future earnings are likely to save more.
• D) An increase in the consumption of households increases the savings of the households.

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Definitions:

Recessionary Pressures

Economic factors or conditions indicating an impending or current period of economic downturn.

Recessions

Intervals of brief economic downturn during which there is a reduction in trade and industry activity, most often marked by a decline in GDP over two successive quarters.

Government Spending

Expenditures made by the government for the purpose of maintaining the economy and public services.

Paradox Of Thrift

The economic theory suggesting that increased saving in the aggregate can lead to a decrease in economic growth, income, and spending.