Planned expenditures equal real disposable income
A) at every point on the consumption function.
B) at every point on the saving function.
C) at every point on the 45-degree line.
D) when saving equals zero.

Question

Quizplus · Accepted Answer

The 45-degree line represents the points where planned expenditures equal real disposable income. This is because at these points, individuals are spending exactly what they are earning, resulting in no net savings or borrowing. Therefore, the correct answer is (C) at every point on the 45-degree line.

Planned Expenditures Equal Real Disposable Income