ECONOMICS
MONEY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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savings
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net loss
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net gain
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None of the above
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Detailed explanation-1: -Savings refers to the part of the income which is not spent on the consumption of goods and services in the economy. It is that portion of the income which is kept aside for an instant and then re-invested into some asset in order to generate more income through these savings.
Detailed explanation-2: -Savings is the portion of current income not spent on consumption. Savings accounts provide an easily accessible place for people to store their money to meet daily living expenses and to have money for emergencies.
Detailed explanation-3: -Income = Consumption + Savings The largest part of total spending is consumption. C = f (Y) If income increases, consumption also increases BUT not as quickly as income. S = f (Y) If income increases, savings also increase BUT at the higher rate than income.
Detailed explanation-4: -Saving is negative at income levels less than Y1 since consumption exceeds income. Negative saving, dissaving, occurs if individual households consume more than their income. They may do so by spending part of their savings or by borrowing.
Detailed explanation-5: -Disposable Income. A Marker of Economy Health.