Use the consumption function shown to answer the following questions. At what le

Question

Use the consumption function shown to answer the following questions. At what level of income is consumption equal to disposable income? Which of the following statements is true? O A. billion. 110 100 B. O C. D. Consumption is $30 billion when the income level is $100 billion. Saving equals consumption at an income level of $40 billion At an income level of S0 billion there is dissaving equal to $20 billion. At an income of $100 billion there is dissaving of $30 bilion. 5 100 110 50 60 Real Disposable Income ($ billions) 1020 80

Explanation / Answer

1- now we have to look for the outcome where the consumption is equal to the disposable income,here this is found where the two lines in the graph intersect.

so this happens at an output level of 40.

2- the statement that is true is C

at 0 level of income the consumption is 20 this means that there is a dissaving of 20 billion.

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.