The saving is negative ata)Zero level of Incomeb)Low level of Incomec)...
To determine at which level of income the saving is negative, we need to understand the relationship between income and saving. Saving is the difference between income and expenditure. If expenditure exceeds income, then saving becomes negative.
Income levels:- Zero level of Income
- Low level of Income
- High level of Income
- Maximum level of Income
Explanation:- At the zero level of income (A), there is no income to save, so the saving is automatically zero or negative.
- At a low level of income (B), individuals may have enough income to cover their basic expenses but not enough to save, resulting in negative saving.
- At a high level of income (C), individuals have enough income to cover their expenses and save, so the saving is positive.
- At the maximum level of income (D), individuals have a surplus income after covering their expenses, resulting in a high positive saving.
Conclusion:At zero level of income, there is some amount of consumption which means autonomous consumption. Since Y - C = S, so at zero level of income savings will be negative.