Consider the General Form of the Consumption Function in a Simple

question 97

Multiple Choice

Consider the general form of the consumption function in a simple macro model.Once government and taxes are included in the model,desired consumption can be expressed as ________,where a = autonomous consumption,t = net tax rate,Y = national income, = disposable income,and MPC = marginal propensity to consume.

• A)C = a + MPC(1 - t)
• B)C = a - (1 - t)
• C)C = a + MPC ∙ Y
• D)C = a + MPC ∙ t ∙
• E)C = a + MPC(1 - t)Y

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Definitions:

Bipolar Disorder

A disorder in mental wellness featuring acute mood swings, from manic or hypomanic episodes to depressive lows.

Tardive Dyskinesia

A neurological disorder resulting from long-term or high-dose use of antipsychotic drugs, characterized by repetitive, involuntary, purposeless movements.

Hedonic Consumption

The aspect of consumer behavior that relates to the emotional and pleasure-seeking aspects of consumption.

Brand Loyalty

The tendency of consumers to continuously purchase products from the same brand due to satisfaction, preference, or emotional connection.