Identify, what does the shaded area (ΔEFG), in the given figure indicate ? (A 45°-line diagram with Income on the X-axis and Consumption on the Y-axis, showing the consumption function C = c̄ + bY intersecting the 45° line at E, with the shaded triangle EFG lying between the 45° line and the consumption function to the right of E.) I. Consumption Income II. Saving = Zero (0) III. Consumption

Question

Identify, what does the shaded area (ΔEFG), in the given figure indicate ? (A 45°-line diagram with Income on the X-axis and Consumption on the Y-axis, showing the consumption function C = c̄ + bY intersecting the 45° line at E, with the shaded triangle EFG lying between the 45° line and the consumption function to the right of E.) I. Consumption > Income II. Saving = Zero (0) III. Consumption < Income IV. Saving < Zero (0) Alternatives : Marginal Propensity to Save (MPS) is the slope of _______ function. (Choose the correct alternative.) (A) Consumption (B) Cost (C) Saving (D) Investment

Accepted Answer

(B) II and III