Question

At breakeven point, consumption (C) is equal to income (Y). (State whether the statement is TRUE or FALSE)

Answer 1

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Answer 2

Answer:

True

Explanation:

At breakeven point, consumption (C) is equal to income (Y). - True

A breakeven point is the point at which the complete price and income is equal which means it is even. There is no net loss or benefit. Although the cost of chance has been paid and the risk-adjusted anticipated return has been obtained.

Thus, it is a point where the supply curve is intersecting with the consumption curve. Consumption (autonomous + induced) at this stage is equivalent to revenue, thus saving is equivalent to zero.