The savings rate is the percentage of disposable income that a person or household saves. Disposable income is the amount of income that is left after taxes have been paid and necessary expenses have been deducted. Therefore, choice D is the best answer as it accurately reflects the definition of the savings rate.

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The Savings Rate Is

Question 130

Multiple Choice

The savings rate is

A) the difference between gross income and disposable income.
B) the ratio of personal income to taxes paid on income.
C) the percent reduction in taxes due to permitted deductions.
D) personal savings as a percentage of disposable income.
E) cash savings as a percentage of total net worth.

Correct Answer: