Use the following to answer questions .
Exhibit: Consumption and Disposable Personal Income
-(Exhibit: Consumption and Disposable Personal Income) Assuming that the relationship between consumption and disposable personal income remains linear throughout its entire range, if disposable personal income were zero, what would personal saving be?
A) −$200 billion
B) $0
C) $200 billion
D) $400 billion

Question

Use the following to answer questions .
Exhibit: Consumption and Disposable Personal Income 
-(Exhibit: Consumption and Disposable Personal Income) Assuming that the relationship between consumption and disposable personal income remains linear throughout its entire range, if disposable personal income were zero, what would personal saving be?
A) −$200 billion 
B) $0 
C) $200 billion 
D) $400 billion

Quizplus · Accepted Answer

If disposable personal income were zero, consumption would be equal to the intercept of the consumption function, which is negative $200 billion, indicating dissaving or negative saving.

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