An economy in which the whole income is not consumed is referred to as______

1. Analyze the question The question asks for the name of an economy in which people do not spend (consume) all their income. That means part of the income is kept back as savings.

2. Explain the concept

• Frugal means careful with money, spending little and saving the rest.
• Spendthrift means spending money wastefully or carelessly, which is the opposite of saving.
• Capitalist economy describes who owns the means of production (private individuals), not how much of income is consumed.
• Mixed economy describes a combination of private and public ownership and decision-making, again not about consumption.

3. Step-by-step solution

• Income can be divided into consumption and saving: Y = C + S.
• If the whole income is not consumed, then S > 0, so the economy is saving part of its income.
• An economy that saves part of its income is behaving thriftily, which means it is frugal.
• Option B is the opposite, because a spendthrift economy would consume everything or even more.
• Options C and D describe economic systems, not saving or consumption behaviour.

4. Answer The correct option is A. Frugal economy.

5. Tip Match the word to its meaning. "Frugal" is linked with saving and thrift, while "spendthrift" is linked with wasteful spending. Also, capitalist, socialist and mixed describe ownership systems, so they are rarely the answer when a question is about spending or saving behaviour.