According to Figure 9.3,which of the following is true?
A)Dissaving occurs at disposable income levels above $20 billion.
B)Consumption is $10 billion when disposable income is zero.
C)The APC is greater than 1 at disposable income levels above $20 billion.
D)At a disposable income level of $20 billion,consumption is zero.

Question

According to Figure 9.3,which of the following is true?
A)Dissaving occurs at disposable income levels above $20 billion. 
B)Consumption is $10 billion when disposable income is zero. 
C)The APC is greater than 1 at disposable income levels above $20 billion. 
D)At a disposable income level of $20 billion,consumption is zero.

Quizplus · Accepted Answer

According to Figure 9.3, when disposable income is zero, consumption is $10 billion. This can be seen as the point where the consumption function intersects the vertical axis (Y-axis) at a level of $10 billion. Therefore, option B is the correct choice. The other options are incorrect as they do not match the information provided in the figure.