Question

After deducting consumption from income whatever amount remains is called? (a) Investment (b) Consumption (c) Savings (d) National income ​

Answer 1

Answer:

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Answer 2

Answer:

The correct option is (c)Savings.

Explanation:

• Savings is the money that remains after expenses and other commitments have been subtracted from income.
• Savings are equal to zero when consumption is equal to income.
• Indicators of household debt or a negative net worth include negative savings.
• The link between saving and income level is expressed by the saving function or inclination. The households just want to save some of their overall disposable income.
• Symbolically, S=f(Y) can be used to represent the functional relationship between income and saving.
• Savings and income are directly correlated. This means that as income rises, saving rises as well, though less proportionately to income.
• Savings are negatively impacted by low income levels. There is no saving in the early phases when income is modest since consuming expenditures are greater than the level of earning. , i.e., dissaving.
• Formula,

        Savings=Income - Consumption.

Hence, we can conclude that ,after deducting consumption from income whatever amount remains is called savings.

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