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One of the most important contributions of the financial markets is to make possible the exchange...

One of the most important contributions of the financial markets is to make possible the exchange of current income/consumption for greater consumption in the future. T or F

For households, savings are equal to personal income minus current consumption and minus taxes. T or F

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Answer #1

1. Given statement is TRUE because financial market will help in capital appreciation and it would make possible the change of current income for greater consumption in future. Financial market will increase the value of the current income by proper investment and capital appreciation.

The given statement is TRUE.

2. given statement is false because saving is not equal to personal income minus current consumption and taxes because even after the current consumption and taxes there would be e a portion which should be kept out for future consumption and there would be disposable expenses and discretionary expenses as well.

Given statement is FALSE.

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