In the Standard 45-Degree Line Expenditure Model, the C

question 164

Multiple Choice

In the standard 45-degree line expenditure model, the C + I line and the C line are parallel because,

• A)all I is assumed to be autonomous.
• B)all I is assumed to be induced.
• C)consumption depends on disposable income.
• D)I rises with GDP at the same rate as C.

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Definitions:

Cash Discount

A reduction in the price of an item or service provided by the seller to the buyer for prompt payment.

Partial Payment

A payment made that is not the full amount due on a debt, bill, or other financial obligation.

Building Materials

Various substances, components, or raw materials used in the construction and repair of buildings and structures.

Cash Discount

A reduction in the invoice amount by the seller to encourage prompt payment by the buyer.