1)If business taxes are reduced and the real interest rate DECREASES:

A. consumption and saving will necessarily increase

B. the level of investment spending might either increase or decrease

C. the level of investment spending will necessarily increase

D. the level of investment spending will necessarily decrease

2)As disposable income increases, consumption:

A. and saving both increase

B. and saving both decrease

C. decreases and savings increases

D. increases and savings decreases