If the Consumption Function Is Above the 45-Degree Line

question 111

Multiple Choice

If the consumption function is above 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:

Inventory Turnover

A measure of how many times a company's inventory is sold and replaced over a particular period.

Profit Margin

A measure of profitability calculated as net income divided by revenue, expressed as a percentage.

Net Fixed Assets

The value of all fixed assets (like property, plant, and equipment) minus any accumulated depreciation.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term and long-term obligations.