Where the Consumption Function Crosses the 45-Degree Line

question 108

Multiple Choice

Where the consumption function crosses the 45-degree line,

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

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Definitions:

Indirect Materials

Materials used in the production process that are not directly part of the final product, such as lubricants and cleaning supplies.

Direct Labor

The cost of wages paid to workers directly involved in the production of goods or services, not including indirect labor costs.

Goods Sold

Refers to the total quantity or value of products that a company has sold over a particular period.

Goods Manufactured

Items that have been completed and are ready for sale, produced by a company during an accounting period.