Assertion (A): The saving function starts below the income axis.
Reason (R): At zero income, saving equals minus autonomous consumption.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

S = −c̄ + (1 − b)Y, which is −c̄ when Y = 0. R explains A.

Concept: Intercept of the saving function
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsThe saving function and break-even

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Assertion (A): The saving function starts below the income axis.Reason (R): At zero income, saving equals minus autonomous consumption.

Explanation

Assertion (A): The saving function starts below the income axis.
Reason (R): At zero income, saving equals minus autonomous consumption.