Question:medium
Under the Keynesian theory, ‘Reference Line’ is a straight line passing through the origin drawn at an angle of ..............
Under the Keynesian theory, ‘Reference Line’ is a straight line passing through the origin drawn at an angle of ..............
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The 45° Reference Line is crucial in Keynesian economics because it helps visualize where the economy's total output equals total spending.
Updated On: Jan 14, 2026
- 25°
- 45°
- 55°
- 75°
Show Solution
The Correct Option is B
Solution and Explanation
In Keynesian economics, the Reference Line denotes the income level at which aggregate demand and aggregate supply are equal. This 45° line illustrates the correlation between aggregate income and expenditure.
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