Question

How is consumption equal to income when saving is equal to zero?

Answer 1

When you don't saving is equal to zero, There is no extra assess you rely on. So what happens in this case is, What you earn, All is spent in the liabilities, And these leads to no savings. And once there is no savings, There is no appreciation in your assets. That's why, If consumption is equal to income, Savings is equal to zero.

Answer 2

Answer:

When consumption is equal to income, saving is zero. Since you consume all you earn. Here,saving curve intersects X axis. When consumption becomes less than income, saving is positive and starts increasing.

Explanation:

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