If, for a given disposable income level, the disposable income line lies below the consumption curve, saving:
A) equals consumption.
B) equals disposable income.
C) is less than zero.
D) is greater than zero.

Question

Quizplus · Accepted Answer

When the disposable income line lies below the consumption curve, it means that consumption exceeds disposable income, indicating that savings are negative. Savings are calculated as disposable income minus consumption; thus, if consumption is greater than disposable income, savings must be less than zero.

If, for a Given Disposable Income Level, the Disposable Income