The correct answer is D. Postponement of consumption and parting with liquidity.
Saving is the act of setting aside money for future use. It is a way to accumulate wealth over time and to protect yourself from financial hardship. There are two main decisions involved in a savings proposition:
- Postponement of consumption: This means that you are choosing to spend less money now so that you can have more money in the future.
- Parting with liquidity: This means that you are giving up the ability to spend your money immediately. When you save money, you are essentially exchanging liquidity for future security.
There are many reasons why people save money. Some people save for retirement, while others save for a down payment on a house or a car. Some people save for emergencies, while others save for vacations or other discretionary purchases.
No matter what your reasons for saving, it is important to have a savings plan. A savings plan will help you to stay on track and reach your financial goals. There are many different types of savings plans available, so you can choose one that fits your needs and your budget.
If you are not sure how to start saving, there are many resources available to help you. You can talk to a financial advisor, read books and articles about personal finance, or join a savings club.
Saving money is an important part of financial planning. By making saving a priority, you can improve your financial security and reach your financial goals.
Here is a brief explanation of each option:
- A. Retention of risk and reduced consumption: This option is not correct because it does not include the decision to part with liquidity. When you save money, you are essentially exchanging liquidity for future security.
- B. Gifting and accumulation: This option is not correct because it does not include the decision to postpone consumption. When you save money, you are choosing to spend less money now so that you can have more money in the future.
- C. Spending and accumulation: This option is not correct because it does not include the decision to part with liquidity. When you save money, you are essentially exchanging liquidity for future security.
- D. Postponement of consumption and parting with liquidity: This option is correct because it includes both of the decisions that are involved in a savings proposition.