Where the Consumption Function Intersects the 45-Degree Line

question 446

Multiple Choice

Where the consumption function intersects the 45-degree line

• A) savings will be negative.
• B) consumption will equal only autonomous consumption.
• C) the average propensity to consume is 0.5.
• D) saving will be zero.

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Definitions:

Net Exports

The net amount obtained by subtracting the total imports from the total exports of a country.

Internationalized

The process of designing products, services, or operations to facilitate operation or distribution in multiple countries.

Budget Deficit

The financial shortfall when a government's expenditures exceed its revenues over a specified period.

Trade Balance

The gap between a nation's foreign sales and purchases, encompassing both goods and services.