In the range of disposable income where the consumption function lies above the 45° line,
A) disposable income is negative.
B) saving is negative.
C) saving is positive.
D) disposable income equals planned expenditures.
E) induced consumption is zero.

Question

Quizplus · Accepted Answer

When the consumption function is above the 45° line, consumption exceeds disposable income, indicating that saving is negative.

In the Range of Disposable Income Where the Consumption Function