At the Point Where the Consumption Schedule Intersects the 45-Degree

question 203

Multiple Choice

At the point where the consumption schedule intersects the 45-degree line,

• A) the MPC equals 1.
• B) the APC is zero.
• C) saving equals income.
• D) saving is zero.

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Definitions:

Noncontrollable Direct Fixed Costs

Fixed costs that cannot be altered or influenced by the decisions of management in the short term.

Indirect Fixed Costs

Costs that are incurred for the benefit of more than one profit center.

Performance Report

A document or record that outlines the performance outcomes, efficiency, and effectiveness of efforts over a defined period.

Profit Center

A segment or division within an organization directly responsible for generating profit through its operations and activities.