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

question 68

Multiple Choice

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

• A) the MPC is 1.00.
• B) the APC is 1.00.
• C) saving is equal to consumption.
• D) the economy is in equilibrium.

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Definitions:

Entitlement

A right or benefit guaranteed by law or contract, especially in the context of social welfare or employee benefits.

Qualified Retirement

A retirement plan that meets requirements set forth by the IRS that allows for tax benefits for the employer and employee.

Strict Tax Regulations

Rigorous laws and rules governing the assessment and collection of taxes from individuals and businesses.

Favorable Tax Treatment

Favorable Tax Treatment involves tax policies that are advantageous to businesses or individuals, reducing the amount of taxes owed.