In the range of disposable income where the consumption function lies above the 45° line,
A)induced consumption is zero.
B)disposable income is negative.
C)saving is negative.
D)saving is positive.
E)disposable income equals planned expenditures.

Question

Quizplus · Accepted Answer

When the consumption function is above the 45° line, consumption exceeds disposable income, resulting in negative saving.

In the Range of Disposable Income Where the Consumption Function