When the consumption function lies above the 45-degree line, households
A. spend on consumption an increasing percentage of any increase in income.
B. spend on consumption a decreasing percentage of any increase in income.
C. are dissaving.
D. save all of any increase in income.
Answer:C
When the consumption function lies above the 45-degree line, households
A. spend on consumption an increasing percentage of any increase in income. B. spend on consumption a decreasing percentage of any increase in income. C. are dissaving. D. save all of any increase in income.