Which of the following equations is correct?
A) Saving = Disposable income + Consumption
B) Saving = Disposable income x Consumption
C) Disposable income = Consumption - Saving
D) Saving = Disposable income - Consumption

Question

Quizplus · Accepted Answer

The correct equation is Saving = Disposable income - Consumption, as saving is what is left over after subtracting consumption from disposable income. Option A is incorrect because adding consumption to disposable income does not result in savings. Option B is also incorrect because multiplying consumption and disposable income does not give savings. Option C is incorrect because disposable income is what is left over after subtracting savings from consumption, not the other way around.

Which of the Following Equations Is Correct