Question

The 45° line drawn in the income determination diagram represents all points where:

विकल्प

• Income equals expenditure

• Consumption equals autonomous investment

• Income exceeds expenditure

• Expenditure exceeds income

Answer 1

Every point on the 45° line is equidistant from both axes, meaning expenditure (vertical axis) equals income (horizontal axis). Equilibrium occurs where the AD curve crosses this line.