Saving is zero. Saving is equal to consumption. The simple Keynesian model suggests a counterintuitive understanding of saving. In the Keynesian aggregate expenditure model, an increase in the marginal propensity to consume will cause the expenditure multiplier to fall. When consumption spending exceeds income dissaving occurs.
Savings are the driving force in the economy.
Saving must equal investment at all times. Prices and wages are flexible and help the economy toward full employment. An additional investment dollar is likely to produce several times that amount in income for the economy. Classical economists trace their intellectual heritage back to John Maynard Keynes. On the next page, with the data from the table above, draw the consumption and savings functions accurately and precisely.