The 45-degree line on a graph relating consumption and income shows
A) all the points where the MPC is constant.
B) all the points at which saving and income are equal.
C) all the points at which consumption and income are equal.
D) the amounts households will plan to save at each possible level of income.

Question

Quizplus · Accepted Answer

The 45-degree line represents the points where consumption is equal to income, which means that households are spending all their income on consumption at these points. Therefore, the correct answer is C.

The 45-Degree Line on a Graph Relating Consumption and Income