Here Is a Consumption Function: C = C₀ + MPC(Y_d)

question 128

Multiple Choice

Here is a consumption function: C = C₀ + MPC(Y_d) .If MPC is 0.80,then we know that

• A) as Yd rises by $1, Co rises by $0.80.
• B) as Yd rises by $1, C rises by $0.80.
• C) Y_d rises by $0.80.
• D) as C₀ rises by $0.80, Y_d rises by $1.

---

Definitions:

SUTA Tax

State Unemployment Tax Act tax, a payroll tax that employers pay to fund their state's unemployment insurance.

Sales Taxes Payable

The liability account used to record the sales tax collected from customers by a seller, which is due to be paid to the government.

Cash Sales

Transactions in which goods or services are paid for and received at the time of the sale, using cash or equivalent.

Sales Taxes

Taxes imposed by governments on the sale of goods and services.