For most of your life, you will be earning and spending money. Rarely, though, will your current money income exactly balance with your consumption desires. Sometimes, you may have more money than you want to spend; at other times, you may want to purchase more than you can afford. These imbalances will lead you either to borrow or to save to maximize the long-run benefits from your income.
When current income exceeds current consumption desires, people tend to save the excess. They can do any of several things with these savings. One possibility is to put the money under a mattress or bury it in the backyard until some future time when consumption desires exceed current income. When they retrieve their savings from the mattress or backyard, they have the same amount they saved.
Another possibility is that they can give up the immediate possession of these savings for a future larger amount of money that will be available for future consumption. This tradeoff of
Was this article helpful?
Providing Knowledge is an Effective Means to Attract Potential Customers. The Internet Has Become an Unlimited Resource for Knowledge and Information and it is by Responding to This Need of Web Users That You Can Increase Your Business Sales, Advertising Revenue and Overall Profitability.