Exhibit 8-2 Consumption Function

question 72

Multiple Choice

Exhibit 8-2 Consumption function

As shown in Exhibit 8-2, the 45 ⁰   line represents:

• A) autonomous consumption.
• B) real consumption spending.
• C) real disposable income.
• D) all points where real consumption equals real disposable income.

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Definitions:

Liability

an obligation or debt that a company or individual has, typically arising during the course of business operations.

Owner's Equity

Owner's Equity, also known as proprietor’s equity, is the residual claim against the assets of a business after all liabilities are paid. It represents the owner’s investment in the business.

Decrease

A reduction in quantity, size, or intensity of something, often reflected in financial metrics and asset values.

Business Transaction

An economic event or activity that changes the financial position or the assets and liabilities of a company.