Income (per year) Savings (per year)
$0 - $-500
5,000 - 0
10,000 - 500
15,000 - 1,000
20,000 - 1,500

Can anyone explain to me the reasoning for the negative savings of $-500 ? Why, if your income is $0 /year would you be loosing $500?

 

Taking out a loan? Just because you don't have money doesn't mean expenses just disappear.

 

Im just wondering if theres a 100% correct answer for this.. like a term to explain this..?

 

the question is "What is the numerical value of the vertical intercept (Y-intercept)? How would you interpret negative savings? "

 

In economics you should NEVER call the constant term of an equation the y-intercept.

It doesn't mean anything.

 

well if you have 0 income, you cant possibly save any money. most likely you will be spending.

 

yep, gotta go with 5gen on this one. No income still means expenses, so there is negative savings as you tap into savings.

 

What level class is this?

 

well its Macroeconomics 201

I took micro 202 last semester.

 

negative savings means you're spending money borrowed on next years income