If the consumption function lies below the 45-degree line, then saving at these levels of disposable income will
A) equal zero.
B) be negative.
C) be positive.
D) be some amount that cannot be determined without additional information.

Question

Quizplus · Accepted Answer

If the consumption function is below the 45-degree line, it means that consumption is less than income, resulting in positive savings.

If the Consumption Function Lies Below the 45-Degree Line, Then