When graphing the consumption function, we include a 45-degree reference line. What is true at the points at which the consumption function crosses this line?
A)Planned real saving is zero.
B)Planned real consumption spending is zero.
C)Real disposable income is zero.
D)Real GDP is zero.

Question

Quizplus · Accepted Answer

At the points where the consumption function crosses the 45-degree line, planned real consumption equals real disposable income, meaning planned real saving is zero.

When Graphing the Consumption Function, We Include a 45-Degree Reference