Refer to the Information Provided in Figure 8

question 195

Multiple Choice

Refer to the information provided in Figure 8.4 below to answer the questions that follow. Figure 8.4
-If the consumption function is below the 45-degree line,

• A) consumption is less than income and saving is positive.
• B) consumption is less than income and saving is negative.
• C) consumption exceeds income and saving is positive.
• D) consumption exceeds income and saving is negative.

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Definitions:

Explicit Cost

Direct payment made to others in the process of running a business, such as wages, rent, and materials.

Future Earnings

The projected income a person or entity will receive from work or investments in the future.

Migration

The movement of people from one place to another, often across political boundaries, for the purpose of settling temporarily or permanently.

Wage Rate

The amount of money paid to an employee for a specific amount of work, typically expressed per hour or year.