income, savings, and consumption

What is savings?

• Income that a household spends

• Income that a household does not spend

• Income that a household invests

• Income that a household donates

What are assets?

• Only financial instruments

• Only cash

• Cash, property, financial instruments, and jewelry

• Only property

What is the Bequest motive for savings?

• To protect against unexpected events

• To invest in property

• To leave something behind for heirs

• To transfer consumption from the present to the future

What is the Consumption Function in macroeconomics?

• People who earn more tend to save more

• People who earn more tend to spend more

• People who earn more tend to donate more

• People who earn more tend to invest more

How can a country allocate its income?

• Only for consumption

• Only for savings

• Between consumption and savings

• Only for investment

When are savings negative according to the text?

• At low levels of income

• At medium levels of income

• At high levels of income

• At all levels of income

What is the relationship between savings and income?

• They are inversely related

• They are negatively related

• They are positively related

• They are not related

What is the main reason for people to save according to the text?

• To protect against expected events

• To leave something for heirs

• To donate to charity

• To spend more in the present

What does Y = C + S represent?

• Income = Investment

• Income = Consumption + Savings

• Income = Savings

• Income = Consumption

What is the Bequest motive for savings?

• To transfer consumption from the present to the future

• To protect against unexpected events

• To leave something behind for heirs

• To invest in property