In the Keynesian aggregate consumption-income graph, the vertical distance between the consumption function and the 45-degree line shows the:
A)amount of savings (or dissavings)at that level of disposable income.
B)amount of disposable income at that level of consumption.
C)increase in planned business investment at each level of inflation.
D)increase in income that causes each change in real GDP.

Question

Quizplus · Accepted Answer

The vertical distance between the consumption function and the 45-degree line represents the difference between total consumption and total income, which is savings (or dissavings) at that level of disposable income.

In the Keynesian Aggregate Consumption-Income Graph, the Vertical Distance Between