Given a Consumption Function of C = $25 + 0

question 27

Multiple Choice

Given a consumption function of C = $25 + 0.75Y_D,the average propensity to consume equals 1 when disposable income equals

• A)$25.
• B)$75.
• C)$100.
• D)-$300.

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Definitions:

Unit Sales

The total number of individual items or products sold within a specific period.

Business Risk

The potential that a company will have lower than anticipated profits or experience a loss rather than making a profit.

EBIT

Earnings Before Interest and Taxes, an indicator of a company's profitability that excludes interest and income tax expenses.

Federal Regulations

Rules set forth by government agencies to control activities within various industries and protect public interests.