In the Standard 45° Line Expenditure Model, the C

question 54

Multiple Choice

In the standard 45° 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:

Social Need

A psychological requirement for wellbeing that involves essential interactions and relationships with other humans within a society.

Biological Needs

Fundamental requirements for survival, such as food, water, shelter, and sleep.

Social Needs

The essential requirements for individuals to feel accepted, valued, and connected within a community or society.

Incentive Theories

Incentive theories suggest that behavior is motivated by a desire for external rewards or incentives.