Figure 9-2
-In Figure 9-2,savings will equal zero when real disposable income equals

Question

Figure 9-2 
-In Figure 9-2,savings will equal zero when real disposable income equals

Quizplus · Accepted Answer

Savings equal zero when all of the disposable income is consumed and nothing is left to save. This typically occurs at the point where the consumption curve intersects the 45-degree line in a graph of consumption against disposable income. Without seeing Figure 9-2, the specific answer relies on standard economic theory which suggests that savings equal zero at the level of income where consumers choose to spend all their income without saving any. Given the options, 600 is a plausible level of real disposable income at which savings could equal zero, assuming it corresponds to the intersection point in the provided figure.

Figure 9-2 -In Figure 9-2,savings Will Equal Zero When Real Disposable Income