Economics A Level (DONEEEEEEE): How can Disposable Income affect both Savings and Consumption?

Question

How can Disposable Income affect both Savings and Consumption?

eric_galvao · Accepted Answer

-Disposable Income [Money after Income Tax and National Insurance] increasing leads to Consumption rising too.
-However, the Rate of Rising Incomes can lead to a Slower Rate of Rising Consumption, as Households may also Save more

Economics A Level (DONEEEEEEE)

How can Disposable Income affect both Savings and Consumption?

-Disposable Income [Money after Income Tax and National Insurance] increasing leads to Consumption rising too. -However, the Rate of Rising Incomes can lead to a Slower Rate of Rising Consumption, as Households may also Save more

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