The graph shows C and S. The vertical gap between the 45° line and the C line at an income of ₹400 crore equals The consumption line C = 40 + 0.75Y, the saving line S = −40 + 0.25Y and a dashed 45° line. C meets the 45° line at B (income ₹160 crore), exactly where S crosses the income axis. At an income of ₹400 crore, C is ₹340 crore and S is ₹60 crore.

The graph shows C and S. — CUET Economics practice

The graph shows C and S.

Question 50

HardOriginal question

The graph shows C and S. The vertical gap between the 45° line and the C line at an income of ₹400 crore equals

The consumption line C = 40 + 0.75Y, the saving line S = −40 + 0.25Y and a dashed 45° line. C meets the 45° line at B (income ₹160 crore), exactly where S crosses the income axis. At an income of ₹400 crore, C is ₹340 crore and S is ₹60 crore.

consumption, ₹340 croreCorrect answerYour answerautonomous consumption, ₹40 croreCorrect answerYour answerincome, ₹400 croreCorrect answerYour answersaving at that income, ₹60 croreCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer D

Correct answer: D

The 45° line is at Y = 400; C is at 340.
The gap 400 − 340 = 60 is the income not consumed: saving, which is the S line's height there.

Concept: Saving as the gap
Typical timeTypical: 100 s
Your timeYours: —

The rule this testsThe saving function and break-even

Practise this chapter →

Ten questions from Aggregate Demand, Consumption & Saving, at your own pace.

Practise this chapter →

Ten questions from Aggregate Demand, Consumption & Saving, at your own pace.

The graph shows C and S.

Question 50

Explanation