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Why do we use 45 degree diagram in economics?

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Question added by Amjed Mehboob , G.M -(Currently Job Seeking ) , Advance Education centre
Date Posted: 2016/04/05
zahera zahrouche
by zahera zahrouche , المحاسبة والوسائل , المركز الجامعي نور البشير

Thanks to invitation; A 45-degree line is used both as a guideline that provides insight into the measured variables and as a critical part of the analysis. This line is perhaps most important in Keynesian economics. It is used in a diagram measuring consumption and income as a means of deriving saving---the difference between income and consumption. It is also used in the Keynesian model (or Keynesian cross) diagram measuring aggregate expenditures and aggregate production as a means of identifying equilibrium--the equality between aggregate expenditures and aggregate production.

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