Figure 2-13 -Refer to Figure 2-13.The Movement from Point B to Point

question 424

Multiple Choice

Figure 2-13
-Refer to Figure 2-13.The movement from point B to point C could have been caused by

• A) inflation.
• B) a change in income.
• C) a change in the price of roses.
• D) a change in the cost of producing roses.

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Definitions:

Disposable Income

Refers to the sum of money available to families for spending and saving purposes once income taxes have been deducted.

APC

Average Propensity to Consume; the ratio of total consumption to total disposable income.

45-Degree Line

A graphical representation in economics, typically used in Keynesian cross diagrams, showing points where aggregate expenditure equals total output or income.

C Line

A reference in economic models, often representing the consumption function, which shows the relationship between consumption and disposable income.