Use the Figure Below to Answer the Following Questions

question 118

Multiple Choice

Use the figure below to answer the following questions.

Figure 27.1.1
This figure describes the relationship between consumption expenditure and disposable income for an economy.
-Refer to Figure 27.1.1. When disposable income is $200 billion,

• A)saving is equal to line segment AD.
• B)households are consuming less than $200 billion.
• C)businesses are spending more than households because the consumption function lies above the 45° line.
• D)households are dissaving an amount equal to line segment AB.
• E)households are saving an amount equal to line segment AB.

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Definitions:

Investing Activities

Financial transactions related to the acquisition or disposal of long-term assets and investments not included in cash equivalents.

Net Cash

The amount of cash available after all cash inflows and outflows have been accounted for over a specific period.

Investing Activities

Financial transactions related to the purchase and sale of long-term assets and investments, as reported on a company's cash flow statement.

Net Cash

Net Cash refers to the amount of cash available after accounting for cash inflows and outflows.