Suppose the Consumption Function Is C = $500 + 0

question 57

Multiple Choice

Suppose the consumption function is C = $500 + 0.8Y. If Y = $1,000, what is the amount of consumption?

• A) $300
• B) $500
• C) $1,000
• D) $1,300

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Definitions:

Balance Sheet

A document that provides a snapshot of a corporation's financial status, by listing its assets, debts, and the equity available to its shareholders at a given time.

Financial Position

A snapshot of an entity's finances at a particular time, including assets, liabilities, and equity, showing its economic standing.

Liabilities

Financial obligations or debts that a business or individual owes to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Assets

Items of value owned by a person or company, including physical property, financial holdings, and intangible items that can be converted into cash.