Theories of Saving and Consumption

The relative income hypothesis

The savings proportion

The increase in income

The average propensity to consume (correct)

Consumption will increase at a higher rate than income

Consumption will decrease as income increases

Consumption will remain constant regardless of income

Consumption will increase proportionally with income (correct)

Savings remain constant regardless of income

Savings decrease as income increases

Savings increase at a higher rate than income

Savings do not increase proportionally with income (correct)

<p>Their relative incomes do not change</p> Signup and view all the answers

<p>All individuals and households</p> Signup and view all the answers