|
AFC: The abbreviation for average fixed cost, which is fixed cost per unit of output, found by dividing total fixed cost by the quantity of output. Average fixed cost is one of three related cost averages. The other two are average variable cost and avarage total cost. Average fixed cost decreases with larger quantities of output. Because fixed cost is FIXED and does not change with the quantity of output, a given cost is spread more thinly per unit as quantity increases. A thousand dollars of fixed cost averages out to $10 per unit if only 100 units are produced. But if 10,000 units are produced, then the average shrinks to a mere 10 cents per unit.
Visit the GLOSS*arama
|
|

|
|
                           INTERCEPT, SAVING LINE: The intercept of the saving line indicates autonomous saving, saving that does not depend on the level of income or production. This can be thought of as the baseline level of saving that would be undertaken if income falls to zero. Autonomous saving is affected by the consumption expenditures determinants, which cause a change in the intercept and a shift of the saving line. The value of the intercept of the saving line is the negative of the value of the intercept of the consumption line. Saving Line | 
| The saving line, also termed propensity-to-save line or saving function, shows the relation between saving and income for the household sector. The income measure commonly used is national income or disposable income. Occasionally a measure of aggregate production, such as gross domestic product, is used instead.A representative saving line is presented in the exhibit to the right. This green line, labeled S in the exhibit, is positively sloped, indicating that greater levels of income generate greater saving by the household sector. This positive relation corresponds to the fundamental psychological law of Keynesian economics. The saving line graphically illustrates the saving-income relation for the household sector, which is the foundation of the leakages line used in Keynesian economics to identify equilibrium income and production. The intercept of the saving line indicates the intersection point between the saving line and the vertical saving axis. The saving line intersects the vertical axis at a value of -$1 trillion. Theoretically, this is a minimum "baseline" level of saving, the amount of saving undertaken if income falls to zero. This level happens to be negative because consumption exceeds income. More to the point, this intersection indicates autonomous saving--saving unrelated to income. Click the [Intercept] button to illustrate. Autonomous saving is saving by the household sector that is unrelated to and unaffected by the level of income or production. This is best indicated by a zero level of income. While individuals occasionally come face-to-face with autonomous saving, as their incomes drop to zero due to unemployment, for the aggregate economy autonomous saving is mostly an unlikely theoretical extrapolation. However, from an analytical perspective, the intercept of the saving line is affected by the consumption expenditures determinants. These are ceteris paribus factors other than income that affect consumption and thus also affect saving, but which are held constant when the saving line is constructed. Any change in these determinants cause the saving line to shift, which necessarily means a new intercept and a new level of autonomous saving.
 Recommended Citation:INTERCEPT, SAVING LINE, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: June 18, 2025]. Check Out These Related Terms... | | | | | | | | | | | | | | | Or For A Little Background... | | | | | | | | | | And For Further Study... | | | | | | | | | | | | | | | |
Search Again?
Back to the WEB*pedia
|


|
|
GRAY SKITTERY [What's This?]
Today, you are likely to spend a great deal of time at an auction hoping to buy either a birthday greeting card for your grandmother or a coffee cup commemorating yesterday. Be on the lookout for malfunctioning pocket calculators. Your Complete Scope
This isn't me! What am I?
|
|
Natural gas has no odor. The smell is added artificially so that leaks can be detected.
|
|
"We must be willing to let go of the life we have planned, so as to have the life that is waiting for us. " -- E. M. Forster, writer
|
|
TIFFE Tokyo International Financial Futures Exchange (Japan)
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|

|