Question

what is the relation between income and savings? (Any two points)

Answer 1

Saving is that part of income which is not spent on current consumption. ... Simply put, saving function (or propensity to save) relates the level of saving to the level of income. It is the desire or tendency of the households to save at a given level of income. Thus, saving (S) is a function (f) of income (Y).

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Answer 2

A rise in real income gives people greater financial resources to spend or save. The rate at which consumers increase demand as income rises is called the marginal propensity to consume. In the most developed countries proportion of Savings increases and Consumption decreases.