The 45-degree line used in a consumption function represents:
A)the saving function.
B)all points at which saving equals disposable income.
C)all points at which consumption equals saving.
D)all points at which all disposable income is consumed.
E)the aggregate income of the economy.

Question

Quizplus · Accepted Answer

The 45-degree line in a consumption function graph represents all points where consumption equals disposable income, meaning all disposable income is consumed.

The 45-Degree Line Used in a Consumption Function Represents