Question

The supply of savings function is:

A.
upward sloping.

B.
downward sloping.

C.
vertical.

D.
horizontal.

Answer 1

A. upward sloping.

Explanation:

Generally, the more disposable income (as the x inside the graph) you have, the more savings you can generate, as long as your spending is proportional or less than when you were making less. Of course, the amount you save can greatly impact the function, as the more you spend, the less steep the graph will be, and vice versa. But as a rule of thumb, the more you earn, the more upward trending the graph will be.

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