If the Consumption Function Coincides with the 45- Degree Line

question 56

Multiple Choice

If the consumption function coincides with the 45- degree line, then we know that

• A)the marginal propensity to consume is greater than one.
• B)desired saving is zero at all levels of disposable income.
• C)desired consumption is constant at all levels of disposable income.
• D)desired consumption equals desired saving at all levels of disposable income.
• E)the marginal propensity to consume is less than one.

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Definitions:

Secured Interest

A legal claim or lien on assets or property, granted to a lender as security for the repayment of a debt, giving the lender rights to the collateral if the debt is not repaid.

Commercially Reasonable

A standard in law and business that measures actions against what a reasonable person engaged in commerce would believe is acceptable or customary practice.

Repossessed Vehicle

A vehicle taken back by a lender or seller from the buyer due to failure to make agreed payments.

Deficiency

The difference between the amount owed on a loan and the proceeds from the sale of the asset securing the loan, if the sale amount does not cover the loan balance.