What does the 45-degree line in the Aggregate Expenditures model represent?
A) all saving and no consumption
B) all consumption and no saving
C) no consumption and no saving
D) maximum consumption and maximum saving

Question

Quizplus · Accepted Answer

The 45-degree line in the Aggregate Expenditures model represents points where aggregate expenditures equal total output or income, implying that all income is consumed with no saving.

What Does the 45-Degree Line in the Aggregate Expenditures Model