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:

Accounts Receivable

The money owed to a company by its customers for goods or services that have been delivered or sold but not yet paid for.

Finished Goods Inventory

The inventory of finished goods that are prepared for sale but remain unsold.

Cost of Goods Sold

Cost of Goods Sold (COGS) represents the direct costs attributable to the production of the goods sold by a company, including material and labor expenses.

Manufacturing Overhead Costs

Indirect costs related to manufacturing that cannot be directly attributed to specific units produced, such as maintenance and utility expenses.