Refer to the above diagram.The break-even level of disposable income:
A)is zero.
B)is minus $10.
C)is $100.
D)cannot be determined from the information given.

Question

Refer to the above diagram.The break-even level of disposable income:
A)is zero. 
B)is minus $10. 
C)is $100. 
D)cannot be determined from the information given.

Quizplus · Accepted Answer

The break-even level of disposable income is where the consumption function intersects the 45-degree line, which in this case occurs at $100. This is the point at which consumption equals disposable income, so any income above this level will result in positive saving and any income below this level will result in negative saving (dissaving).

Refer to the Above Diagram