The Vertical Distance Between the Consumption Function and the 45°

question 78

Multiple Choice

The vertical distance between the consumption function and the 45° line measures

• A)disposable income.
• B)consumption.
• C)saving or dissaving.
• D)the marginal propensity to consume.
• E)the marginal propensity to save.

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Definitions:

Barriers

Obstacles that prevent entry into a market or hinder competition within a market.

Market Structure

The features of a market, including its structure, that affect how competition and pricing are determined.

Monopolistic Competition

A common form of industry (market) structure characterized by a large number of firms, no barriers to entry, and product differentiation.

Perfectly Competitive

A market structure where there are many sellers and buyers, homogeneous products, and no single buyer or seller can influence prices.