“As the income increases, people tend to save more". Justify the given statement.
Answers
Answer:
At a lower level of income, a consumer spends a larger proportion of his/her income on consumption expenditure (basic survival requirements). As the income increases, owing to the psychological behavior of a consumer (rational), people tend to consume less and save more for future uncertainty.
Answer: The statement justifies that -
Explanation: The time when the income starts increasing with that age also starts increasing and so the responsibilities on oneself and the cost of living, and to save one's future is also important. This led to saving the income more to fulfill those responsibilities and the people who save invest regularly as well and are on the safer side as compared to other people and to enjoy a good lifestyle the rise in salary leads to saving more.
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