In graph that shows disposable income on the horizontal axis and consumption on the vertical axis, at every point on the 45-degree line,
A) the value of disposable income equals the sum of personal saving and consumption.
B) the value of disposable income equals consumption.
C) the value of disposable income equals personal saving.
D) the value of disposable income and consumption equals 1.

Question

Quizplus · Accepted Answer

The 45-degree line represents the points where disposable income and consumption are equal. Therefore, at every point on the 45-degree line, the value of disposable income equals consumption.

In Graph That Shows Disposable Income on the Horizontal Axis