(Figure: Consumption Spending) At point A in the graph provided
A) saving is $20.
B) consumption is zero.
C) saving is zero.
D) consumption exceeds income by $20.

Question

(Figure: Consumption Spending) At point A in the graph provided 
A) saving is $20. 
B) consumption is zero. 
C) saving is zero. 
D) consumption exceeds income by $20.

Quizplus · Accepted Answer

At point A, the expenditure or consumption line intersects with the 45-degree line, indicating that consumption equals disposable income. Therefore, there is no saving at this point, making choice C the correct answer. Choices A and D are incorrect because they imply the presence of saving, while choice B is incorrect because it implies zero consumption.

(Figure: Consumption Spending) at Point a in the Graph Provided