Suppose the Consumption Function Is C = $200 + 0

question 142

Multiple Choice

Suppose the consumption function is C = $200 + 0.85Y_D.If disposable income is $400,consumption is

• A)$200.
• B)$540.
• C)$340.
• D)$185.

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Definitions:

Merger Premium

The additional cost or amount by which a company's purchase price exceeds the pre-merger valuation of the target company.

Stand-Alone Value

The intrinsic worth of an investment or project if undertaken independently, without considering synergies or external factors.

Greenmail

A strategy where a large shareholder is bribed by the target company to not take over the company by buying back their shares at a premium price.