The personal savings rate is calculated as:

Question

Quizplus · Accepted Answer

The personal savings rate is calculated by dividing personal savings by disposable personal income, which represents the income that is available for household consumption and saving after taxes and government transfers are taken out. Choice A is incorrect because it divides personal savings by personal outlays, which includes both consumption and savings. Choice C is also incorrect because it divides disposable personal income by personal outlays, which yields a different ratio altogether. Choice D is incorrect because it divides personal income by personal outlays, which does not reflect the amount that is available for saving.

The Personal Savings Rate Is Calculated As