Keynes' Theory of Consumption Predicts That the Aggregate Saving Rate

question 100

Multiple Choice

Keynes' theory of consumption predicts that the aggregate saving rate

• A)increases as society becomes richer.
• B)falls as society becomes richer.
• C)is constant in the long-run.
• D)falls with higher incomes in a cross-section of income.

---

Definitions:

Technological Improvement

Advances in technology that enhance efficiency, productivity, or capabilities in production or services.

Chip Dip

A variety of sauces or seasonings into which chips are dipped to enhance their flavor.

Substitute Goods

Products or services that can serve as replacements for each other; when the price of one increases, the demand for the alternative typically increases.

Birth Rate

The number of live births per thousand people in a population over a given period of time.