Thank you. :) The following graphs show shifts of the current consumption schedu

Question

Thank you. :)

The following graphs show shifts of the current consumption schedule and shifts of the current saving schedule. Determine how the following event would shift the consumption schedule and the saving schedule. Frances deposits $20 into her savings account each month. This monthly deposit is known as and is an example of a concept. At the end of the year, her balance reflects the total $240 she has deposited. This amount is known as and is an example of a concept. True or False: Investment is the same type of concept as the savings account balance. True False

Explanation / Answer

1) If people know that their future income will decline,they will start consuming less today and saving more today so that they can have enough income in future.So consumption shift down from C0 to C2.Saving shft up from S0 to S2.

2)Fixed monthly deposit is known as recurring deposit.It is an example of Term deposit concept.End of year amount is known as Total amount or maturity value and it is an example of fixed deposits.

3)No ,they are different.Saving means we are keeping aside some cash for emergency.Investment means putting you are investing money to get returns and profit.So ,it is false.

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