When the Consumption Function Lies Above the 45 -Degree Line

question 3

Multiple Choice

When the consumption function lies above the 45 -degree line, households

• A) are dissaving.
• B) spend on consumption a decreasing percentage of any increase in income.
• C) save all of any increase in income.
• D) spend on consumption an increasing percentage of any increase in income.

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Definitions:

Republic's Ideology

A set of beliefs and values that emphasizes the welfare of the community over individual interests, supporting a form of government where power resides in elected individuals representing the citizen body.

Social Philosophies

Encompasses the ideologies and beliefs that societies hold, concerning social organization, governance, and relationships among individuals within a community.

Economic Philosophies

The study of how societies use scarce resources to produce valuable commodities and distribute them among different people; encompasses various theories and schools of thought on how economies should be structured and managed.

Political Philosophies

Systems of thought and belief concerned with concepts such as justice, authority, liberty, and the role of governments in society.