The Figure Given Below Represents the Saving Function of an Economy

question 3

Multiple Choice

The figure given below represents the saving function of an economy.
Figure 9.1

-Refer to Figure 9.1. Which of the following statements is true for real GDP levels below $400 billion?

• A) Saving exists because consumption is smaller than disposable income.
• B) Saving does not exist because consumption exceeds disposable income.
• C) The corresponding section of the consumption function lies below the 45-degree line.
• D) Autonomous consumption is equal to zero.
• E) The slope of the consumption function becomes negative.

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Definitions:

Securities Exchange Act

A U.S. law governing the trading of securities, such as stocks and bonds, to protect investors against fraud.

Blue-Sky Laws

State laws in the United States designed to protect investors from securities fraud by regulating the offering and sale of securities to the public.

Interstate Securities

Securities transactions or offerings that occur across state lines, subject to federal laws and regulations.

Wrongful Discharge

The unjust firing or termination of an employee in violation of legal or contractual terms.