Savings Are Generated When Current Consumption Is Less Than Current

question 22

True/False

Savings are generated when current consumption is less than current output.

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Definitions:

Retained Earnings

The part of the net earnings kept by the company instead of being paid out to shareholders as dividends.

Common Stock

A type of equity security that represents ownership in a corporation, granting holders the right to vote at shareholder meetings and receive dividends.

Retained Earnings

The cumulative amount of net income kept in the company to be reinvested in its core business or to pay debt, after paying dividends to shareholders.

Expenses

Expenses are the costs incurred in the process of generating revenue, and they can include items like rent, salaries, and utilities.