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Question
Choose the correct answer :
The income which is not spent on consumption is known as _________.
Options
(a) Saving
(b) Loss
(c) Profit
(d) Transaction
Solution
The income which is not spent on consumption is known as saving.
Explanation:
Income has two major components i.e., consumption and savings. This means an individual can utilise his/her income in two ways, either by consuming it (by purchasing goods and services or for investment purposes) or by saving it (by depositing it in banks). Thus, it can be said that income which is not consumed is saving.
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