On a Graph of a Consumption Function, What Is the Significance

question 51

Multiple Choice

On a graph of a consumption function, what is the significance of the 45- degree line?

• A)Desired consumption is zero at all points along the 45- degree line.
• B)It shows the slope of the average consumption function, against which we measure other consumption functions.
• C)It connects all points where desired consumption equals desired saving.
• D)It connects all points where desired consumption equals desired expenditure.
• E)It connects all points where desired consumption equals actual disposable income.

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