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40. SAVING
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CONSUMPTION
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1.
Meaning
Saving
is that part of income which is not spent on current consumption.
2.
Formula
S
= Y-C, where S = Saving, Y =Income and C =
Consumption.
3.
Function
Savings
is a function of income but depends on liquidity, preference, and rate of
interest.
4.
Importance
Savings
encourages investments and capital formation in the economy.
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It refers to the expenditure incurred by
the people to purchase goods and services to satisfy their various wants.
C = Y- S, where S = Saving, Y =Income and
C= Consumption.
Consumption is a function of income, i.e.
C = f (Y)
Consumption encourages further production
of goods and services in the economy.
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SAVING CONSUMPTION
