ʺDissavingʺ occurs when
A) the consumption function is below the 45-degree line drawn from the origin.
B) saving is positive.
C) income exceeds consumption expenditure.
D) saving is negative.

Question

Quizplus · Accepted Answer

Dissaving occurs when saving is negative, which means that consumption expenditure exceeds income. This can be represented by a consumption function that is above the 45-degree line.

ʺDissavingʺ Occurs When