Question

In the Keynesian Economics, ______ starts from the origin and is always drawn at an angle of 45°.

Options

• Consumption curve

• Aggregate demand curve

• Reference line

• Investment curve

Answer 1

In the Keynesian Economics, reference line starts from the origin and is always drawn at an angle of 45°.

Explanation:

The 45° line is frequently referred to as the reference line or 45° line in Keynesian economics. Beginning at the origin, this line shows every position at which total demand (or total expenditure) equals total output (or total revenue). To ascertain economic equilibrium, it serves as a benchmark for comparison with other curves, such as the consumption or aggregate demand curves.