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The Diagram Below Shows Desired Aggregate Expenditure for a Hypothetical

question 17

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The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy: • marginal propensity to consume (mpc) = 0.80
• net tax rate (t) = 0.15
• no foreign trade
• fixed price level
• all expenditure and income figures are in billions of dollars. The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy: • marginal propensity to consume (mpc) = 0.80 • net tax rate (t) = 0.15 • no foreign trade • fixed price level • all expenditure and income figures are in billions of dollars. FIGURE 22-3 Refer to Figure 22-3.Which of the following correctly describes the consumption function for this economy? A) C = 325 + (0.65) Y B) C = 350 + (0.68) Y<sub>D</sub> C) C = 350 + (0.68) Y D) C = 1000 + (0.80) E) C = 1000 + (0.80) Y FIGURE 22-3
Refer to Figure 22-3.Which of the following correctly describes the consumption function for this economy?

Definitions:

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