GENERAL KNOWLEDGE

THE PART OF INCOME AFTER TAX THAT IS NOT CONSUMED IS DEFINED AS

  • A. Wages and salaries
  • B. Saving ✓
  • C. Capital investment
  • D. Nondurable goods expenditure

 

The answer to the question is: B. Saving

Saving refers to the portion of income that is not spent on consumption and is instead set aside for future use or investment. It represents the act of preserving income for future needs or goals, such as building an emergency fund, making a large purchase, or investing for retirement.

Saving plays a crucial role in an individual’s financial well-being and economic stability. It provides a financial cushion for unexpected expenses, helps individuals achieve their long-term financial objectives, and contributes to overall economic growth by providing funds for investment in businesses and infrastructure.

When individuals save, they can choose to deposit their savings in various financial instruments such as savings accounts, certificates of deposit (CDs), money market accounts, or invest in stocks, bonds, mutual funds, real estate, or other assets. These savings can also be used to build wealth over time through the power of compounding interest and investment returns.

In macroeconomics, saving is an important determinant of a country’s overall economic health. National saving contributes to the accumulation of capital, which fuels investment in productive assets and infrastructure, leading to increased productivity and economic growth.

Overall, saving represents a fundamental aspect of personal finance and macroeconomic policy, playing a significant role in shaping individual financial security and national economic prosperity.