Given a Consumption Function of C = $25 + 0

question 16

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.

---

Definitions:

Book Value

The net value of a company's assets minus its liabilities, often used to determine a company's value should it decide to liquidate.

Partnership Assets

Assets that are owned by a partnership and used in the operation of the business.

Current Values

The present market value of an asset or financial instrument, which can fluctuate over time based on market conditions.

Asset Accounts

consist of all accounts that track the assets owned by an entity, including cash, inventory, property, and equipment.