Exhibit 10-7 -Here Is a Consumption Function: C = C₀ + MPC(Y_d).If

question 28

Multiple Choice

Exhibit 10-7

-Here is a consumption function: C = C₀ + MPC(Y_d) .If MPC is 0.75,then we know that

• A) as Y_d rises by $1, C_o rises by $0.75.
• B) as Y_d rises by $1, C rises by $0.75.
• C) Y_d rises by $0.75.
• D) as C₀ rises by $0.75, Yd rises by $1.

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