What role does disposable income play in determining a household's consumption and savings?

• A. Disposable income is the total income before taxes, which determines consumption only.
• B. Disposable income is the amount left after taxes, which can be used for consumption or savings.
• C. Disposable income is the amount left after savings, which can be used for consumption.
• D. Disposable income is irrelevant to both consumption and savings.

Answer: (B)