Where the consumption function intersects the 45-degree line

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


Answer: A

Economics

You might also like to view...

How does an increase in interest rates affect net exports?

What will be an ideal response?

Economics

An example of a good that creates a positive network externality is:

A. the telephone. B. social network websites (e.g. Facebook). C. a workers’ union. D. All of these are examples of good that create positive network externalities.

Economics

If the elasticity of supply of a resource is greater than zero but less than infinity, its income will comprise of:

a. only economic rent. b. only transfer earnings. c. salaries and traveling allowances. d. both economic rent and transfer earnings. e. salaries, traveling allowances, as well as other incentives.

Economics

Macroeconomic topics do not usually include: a. the rate of inflation

b. the rate of unemployment. c. economic growth. d. the profit maximizing decisions of an individual firm.

Economics