Where the consumption function crosses the 45° line

Name: Where the consumption function crosses the 45° line
Brand: Quizplus
Rating: 4.7 (53 reviews)

Question

Quizplus · Accepted Answer

The consumption function crosses the 45° line at the point where consumption expenditure equals disposable income. This is because the 45° line represents all points where the amount spent (on the vertical axis) equals the amount earned or received (on the horizontal axis), indicating equality between consumption expenditure and disposable income.

Where the Consumption Function Crosses the 45° Line