Saving in the economy:
A) Occurs when current spending is less than current incomes
B) Is generally not a determinant of future output
C) And investment are essentially the same concept
D) Occurs when current consumption is more than current output

Question

Quizplus · Accepted Answer

Saving in the economy occurs when current spending (consumption) is less than current incomes. This excess of income over consumption is saved and can be used for future spending or investment. Option B is incorrect as savings can impact future output by providing funds for investment, leading to increased production and output. Option C is incorrect as savings and investment are separate concepts, although they are related. Option D is incorrect as current consumption cannot be greater than current output, as output is what creates consumption in the first place.

Saving in the Economy