1.

FIGURE 9-2 (a) Consumption and (b) saving schedules. The two parts of this figure show the income-consumption and income-saving relationships in Table 9-1 graphically. The saving schedule in (b) is found by subtracting the consumption schedule in (a) vertically from the 45 degree line. Consumption equals disposable income (and saving thus equals zero) at $390 billion for these hypothetical data.
R-1 9-2

The slope of the consumption schedule in this figure is .75. Thus, the

A. slope of the saving schedule is 1.33.
B. marginal propensity to consume is .75.
C. average propensity to consume is .25.
D. slope of the saving schedule is also .75.



2.

FIGURE 9-2 (a) Consumption and (b) saving schedules. The two parts of this figure show the income-consumption and income-saving relationships in Table 9-1 graphically. The saving schedule in (b) is found by subtracting the consumption schedule in (a) vertically from the 45 degree line. Consumption equals disposable income (and saving thus equals zero) at $390 billion for these hypothetical data.
R-1 9-2

In this figure, when consumption is a positive amount, saving

A. must be a negative amount.
B. also must be a positive amount.
C. can be either a positive or a negative amount.
D. is zero.



3.

FIGURE 9-2 (a) Consumption and (b) saving schedules. The two parts of this figure show the income-consumption and income-saving relationships in Table 9-1 graphically. The saving schedule in (b) is found by subtracting the consumption schedule in (a) vertically from the 45 degree line. Consumption equals disposable income (and saving thus equals zero) at $390 billion for these hypothetical data.
R-1 9-2

In this figure,

A. the marginal propensity to consume is constant at all levels of income.
B. the marginal propensity to save rises as disposable income rises.
C. consumption is inversely (negatively) related to disposable income.
D. saving is inversely (negatively) related to disposable income.



4.

FIGURE 9-2 (a) Consumption and (b) saving schedules. The two parts of this figure show the income-consumption and income-saving relationships in Table 9-1 graphically. The saving schedule in (b) is found by subtracting the consumption schedule in (a) vertically from the 45 degree line. Consumption equals disposable income (and saving thus equals zero) at $390 billion for these hypothetical data.
R-1 9-2

When consumption equals disposable income,

A. the marginal propensity to consume is zero.
B. the average propensity to consume is zero.
C. consumption and saving must be equal.
D. saving must be zero.




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