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:

Atomic Sentences

Simple sentences that contain no logical connectors and cannot be broken down into smaller components.

Truth Values

The valuation in logic that indicates the truthfulness of a statement, typically identified as 'true' or 'false'.

Truth Table

A mathematical table used in logic to determine the truth values of a logical expression based on all possible combinations of its variables.

Atomic Sentences

Simplest statements in logic that express a complete thought or claim without any logical connectives, capable of being true or false.