Along the 45-Degree Line in the Graph of Consumption and Disposable

question 22

Multiple Choice

Along the 45-degree line in the graph of consumption and disposable income

• A) consumption is equal to disposable income.
• B) consumption is equal to total saving.
• C) consumption is equal to marginal saving.
• D) the interest rate is zero.

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Definitions:

Operating Activities

Activities related to the day-to-day functioning of a business that are reflected in its cash flow from operations.

Net Income

The company's net income following the deduction of all costs and taxes from its total revenue.

Investing Activities

Transactions involving the acquisition or sale of long-term assets and investments, reflected in a company’s cash flow statement.

Financing Activities

Activities that result in changes in the size and composition of the equity capital and borrowings of the entity.