When planned expenditure is drawn on a graph as a function of income, the slope of the line is:
A) zero.
B) between zero and one.
C) one.
D) greater than one.

Question

Quizplus · Accepted Answer

The slope of the planned expenditure line is typically between zero and one, as income increases, people tend to spend a higher proportion of that income but not all of it. If the slope is zero, it means that there is no relationship between income and planned expenditure, while a slope greater than one means that people are spending more than they earn, which is not sustainable in the long run.

When Planned Expenditure Is Drawn on a Graph as a Function