Advertisements
Advertisements
Question
The 45° line drawn in the income determination diagram represents all points where:
Options
Income equals expenditure
Consumption equals autonomous investment
Income exceeds expenditure
Expenditure exceeds income
MCQ
Advertisements
Solution
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.
shaalaa.com
Is there an error in this question or solution?
