Compare graph 30.1 with graph 30.2 Using the graph 30.1 Compare what occurred to C and S in 2007 and 2018. Explain why it happened.

30.2

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FIGURE 30.1 Consumption and disposable Income, 1993-2015. Each dat in this figure shows consumption and disposable income in a specific year. The line C which generalizes the relationship between consumption and disposable income, indicates a direct relationship and shows that households consume most of their after-tax incomes $14.000 15 14. 12,000 13 12 09 10 10,000 OB 02 Saving in 2005 06 05 45 reference line C=DI Consumption (blillons of dollars) 8,000 %o o o out 99 Consumption in 2005 6,000 98 92 95 96 94 92 4.000 45 4,000 0 12,000 $14,000 6,000 8.000 10,000 Disposable income (billions of dollars) 500 475 450 Consumption schedule Consumption (billions of dollars) 425 Saving $5 billion 400 375 Dissaving $5 billion 45 370 430 510 530 550 390 410 450 470 490 Disposable Income (billions of dollars) (a) Consumption schedule 50 Saving schedule 25 Saving (billions of dollars) Dissaving $5 billion Saving $5 billion 0 O 510 530 550 390 410 430 450 470 490 Disposable income (billions of dollars) (b) Saving schedule