A family could have a positive savings ratio at the same time that its debt service ratio is increasing.

Question

Quizplus · Accepted Answer

A positive savings ratio means that the family is saving more money than it is spending, which is a good sign that it is financially stable. However, the debt service ratio only looks at the family's debt payments and their income, so an increase in debt payments could cause the ratio to increase even if the family is still saving money. Thus, it is possible for these two ratios to be moving in opposite directions at the same time.

A Family Could Have a Positive Savings Ratio at the Same