At the point where the consumption schedule intersects the 45-degree line,
A) the MPC equals 1.
B) the APC is zero.
C) saving equals income.
D) saving is zero.

Question

Quizplus · Accepted Answer

At the point where the consumption schedule intersects the 45-degree line, saving is zero because all of the income is being consumed. This intersection point represents the level of income where there are no savings, as all income is exactly equal to consumption.

At the Point Where the Consumption Schedule Intersects the 45-Degree