Question

If disposable personal income is 10 and consumption is 12, what is personal savings? What does this mean

Answer 1

Answer:

Personal saving is -2. This means that the expenses are more than the income and there is no saving but a net loss of 2.

Explanation:

Saving = Income - Consumption

= 10 - 12

= -2

Answer 2

Explanation:

By increasing the amount of money in the economy, the central bank encourages private consumption. Increasing the money supply also decreases the interest rate, which encourages lending and investment. The increase in consumption and investment leads to a higher aggregate demand.