Question

Dissaving means Multiple Choice the same thing as disinvesting. that disposable income is less than zero. that households are spending more than their current incomes. that saving and investment are equal.

Answer 1

Answer:

Households are spending more than their current income.

Explanation:

Saving means Income that is not consumed & kept for precautionary, contingency purposes . Savings = Income - Consumption.

Dissaving means opposite: Consumption > Income (fulfilled out of previous savings reduction). The concept is clear from above formula also when savings will me mathematically negative , when Consumption > Income.

Dissaving is represented by saving function intercept on negative Y axis (reflecting autonomous consumption i.e consumption at zero level of income).

Other options are incorrect as : Income can be least zero , but not negative (less than 0) . Savings = Investment is rather macroeconomic equilibrium case , completely unrelated with negative savings.