Let Real GDP =Y = Y_d, and the Consumption Function

question 85

Multiple Choice

Let real GDP =Y = Y_d, and the consumption function is C = $1,000 + .06Y. JWhat is the value of autonomous consumption (A) and what is the marginal propensity to consume (MPC) ?

• A) A = $600; MPC = 0.4
• B) A = $1,000; MPC = 0.6
• C) A = $1,600; MPC = 2.5
• D) A = $2,500; MPC = 0.6

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Definitions:

Memory Decay

The gradual fading or weakening of memories over time, especially when they are not periodically retrieved or recalled.

Source Amnesia

A type of amnesia where an individual can remember specific information, but cannot recall how, when, or where they learned that information.

Imagination Inflation

A phenomenon where imagining an event can increase confidence in the false belief that the event actually occurred in the past.

Sensory Memory

The shortest-term element of memory that allows individuals to retain impressions of sensory information after the original stimulus has ceased.