Savings is defined as which of the following?

Savings is defined as which of the following?

• A. The amount spent
• B. The amount left over after spending is subtracted from disposable income
• C. The total income before deductions
• D. The taxes owed

Answer: (B)

Saving is the portion of disposable income that remains after you have spent on current needs and wants. In other words, it’s the amount left over when spending is subtracted from what you have after taxes. For example, if you earn $3,000 after taxes and spend $2,000, you save $1,000. This saved money can be used later or invested. In macro terms, savings equals disposable income minus consumption (S = Yd − C). If you spend more than your disposable income, you’re dissaving, resulting in negative savings.

Saving is the portion of disposable income that remains after you have spent on current needs and wants. In other words, it’s the amount left over when spending is subtracted from what you have after taxes. For example, if you earn $3,000 after taxes and spend $2,000, you save $1,000. This saved money can be used later or invested. In macro terms, savings equals disposable income minus consumption (S = Yd − C). If you spend more than your disposable income, you’re dissaving, resulting in negative savings.