Q619
Which of the two decisions are involved in a savings proposition?
A.
Retention of risk and reduced consumption
B.
Gifting and accumulation
C.
Spending and accumulation
D.
Postponement of consumption and parting with liquidity
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Postponement of consumption and parting with liquidity are involved in a savings proposition. Postponement of consumption: an allocation of resources between present and future consumption.
Parting with liquidity (or ready purchasing power) in exchange for less liquid assets. For instance, purchase of a life insurance policy implies exchanging money for a contract which is less liquid.