At the point where the consumption function crosses the 45-degree line:
A)consumption is equal to disposable income, and therefore, saving is zero.
B)consumption is less than income, and saving is present.
C)consumption is greater than income, and dissaving is present.
D)planned saving equals actual saving minus disposable income.

Question

Quizplus · Accepted Answer

At the point where the consumption function crosses the 45-degree line, consumption equals disposable income, meaning there is no saving or dissaving, so saving is zero.

At the Point Where the Consumption Function Crosses the 45-Degree