The difference between savings and saving
A) is called money illusion.
B) is that savings occurs when consumption does not and saving is used to purchase consumption goods.
C) is that savings is a stock concept and saving is a flow concept.
D) is that savings is measured in real terms while saving is measured in nominal terms.

Question

Quizplus · Accepted Answer

Savings refers to the accumulation of wealth over time and is a stock concept, while saving refers to the act of setting aside money on a regular basis and is a flow concept. It is important to differentiate between the two when discussing personal finance or macroeconomic policy. Money illusion refers to the mistaken belief that nominal values are more important than real values. Option B is incorrect because saving can be used for investment, not just consumption. Option D is incorrect because both savings and saving can be measured in nominal terms or real terms.

The Difference Between Savings and Saving