In a graph with disposable income on the horizontal axis and consumption on the vertical axis,the intersection of the 45-degree line with the
A)Consumption function indicates zero saving.
B)Aggregate spending curve indicates full employment.
C)Full-employment output indicates equilibrium (macro).
D)Aggregate demand curve indicates equilibrium.

Question

Quizplus · Accepted Answer

The 45-degree line represents points where consumption equals disposable income, indicating zero saving.

In a Graph with Disposable Income on the Horizontal Axis