Question

Draw on a diagram a straight line saving line curve for an economy. From it derive the consumption curve, explaining the method of derivation. Show a point on the consumption curve at which APC is equal to 1 and APS is Zero. (3+1+1) OR How increase in investment will affect income level of an economy? Explain with the help of an example and diagram.

Answer 1

Answer:

Remember, 45° dotted line is called expenditure equals income line where each point shows expenditure equal to income. Thus point B becomes the point on consumption curve at which OD (or BR) = OR. By joining points C and B and extending it further, we get consumption curve.

Explanation:

Please mark me as brainliest