Where the consumption function crosses the 45° line
A) saving is positive.
B) saving is negative.
C) consumption expenditure equals saving.
D) consumption expenditure equals disposable income.

Question

Quizplus · Accepted Answer

At the point where the consumption function crosses the 45° line, consumption expenditure equals disposable income, meaning all income is used for consumption with no saving.

Where the Consumption Function Crosses the 45° Line