Question

Define or explain the following concepts.
Dis-savings.

Answer 1

Dis-savings refer to the negative savings i.e. using the past savings or expenses met by borrowing. Dis-savings are done when the consumption expenditure is greater than the income $(C>Y)$. This consumption is called autonomous consumption which is income inelastic. To meet the consumption expenditure, the past savings are used. This is called dis-savings when people may borrow money to meet the consumption expenditure.
The diagram shows the dis-savings, which is to the left of the Break even point. Also when there is dis-saving, the saving function curve will be in the negative quadrant.