In the Graph for the Consumption Function, the 45-Degree Line

question 162

Multiple Choice

In the graph for the consumption function, the 45-degree line

• A) contains only a consumption component.
• B) represents both planned consumption and planned investment.
• C) shows various combinations where planned consumption equals real disposable income.
• D) reflects a decreasing APC as real disposable income rises.

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Definitions:

Erik Erikson

A developmental psychologist known for his theory on the psychological development of humans in eight stages from infancy to adulthood.

Basic Biological Needs

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

Sound Attachments

Emotional bonds between individuals, often formed through verbal communication, speech, and shared musical experiences.

Trust Versus Mistrust

A stage in Erik Erikson's theory of psychosocial development where an infant learns to trust their caregivers and environment or develops mistrust based on the consistency of care and affection received.