Question

12 and 13

QUESTION 12 The difference between "saving" and "savings" is that saving is placed in financial institutions such as banks, while savings are kept at home by people. saving is done by households and savings are done by businesses. saving is undertaken as a precaution against unemployment and savings are undertaken to increase investment spending. savings are cumulation of past and current saving. QUESTION 13 Real Disposable Income per Year 1.000 2.000 3.000 4.000 5.000 6,000 7,000 8.000 9.000 10.000 Planned Real Consumption per Year $1.000 1.800 2,600 3,400 4.200 5,000 5,800 6.600 9.000 In the above table, the level of autonomous consumption is $0. $5,000. $1,000 $9,000

Answer 1

12) Saving is a flow variable happening over time where one does not consume one's assets, whereas savings is a stock variable that refers to reduction in costs or assets in the form of cash. Thus,savings are cumulation of past and current assets. Option d) is correct.

13) Autonomous consumption occurs even when the disposable income is 0. Therefore, option c) 1000 is the answer.