Discuss the significance of 45 degree …
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Soni Shukla 8 years ago
expenditure ( C )
Saying (Y-C) Y = AS = C+S
0 200 -200 0
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400 400 0 400
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At all points on 45 degree line, Consumption is equal to Income. It helps under the Keynesian
Economic analysis.Since the two variables (consumption/Aggregate Expenditure and Income)
are measured in the same units, the 45-degree line has a slope of one and it bisects the 90-
degree angle formed by the two axes.
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