Suppose the Consumption Function Is C = $500 + 0

question 35

Multiple Choice

Suppose the consumption function is C = $500 + 0.8Y. If Y = $1,000, then induced consumption is

• A) $500.
• B) $800.
• C) $1,000.
• D) $1,300.

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Definitions:

National Income

The total value of all goods and services produced by a country's economy over a specific period, usually measured annually.

Richest Tenth

The segment of a population that represents the highest 10% in terms of wealth or income.

Poorest Fifth

The segment of a population that falls within the lowest 20% in terms of income distribution.

Richest Half

The segment of a society that holds more than 50% of its wealth.