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The diagram shows an aggregate demand schedule.

The diagram contains a vertical axis, which is labelled as ‘Aggregate Demand’ and a horizontal axis which is labelled as ‘Income’.

There is a straight line from the origin, sloping upwards at 45 degrees.

The aggregate demand schedule is a straight line, sloping up from left to right, from a point about one quarter of the way up the vertical aggregate demand axis. The slope of the schedule is quite shallow.

The aggregate demand schedule intersects the 45 degree line about half way along the 45 degree line. From this point of intersection, a dashed vertical line is taken down to the horizontal Income axis, to a point on the axis labelled as capital letter Y followed by a star.

 3 The consumption function