Which of the following represents the relationship between disposable income (DI), consumption (C), and saving (S)?
A) DI + C = S
B) DI = C + S
C) DI = C * S
D) DI = C - S

Question

Quizplus · Accepted Answer

This equation is known as the consumption-saving identity, which states that disposable income (DI) equals consumption (C) plus saving (S). This relationship is fundamental to understanding how households allocate their income between spending and saving.

Which of the Following Represents the Relationship Between Disposable Income