Consider the General Form of the Consumption Function in a Simple

question 41

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,YD = disposable income,and MPC = marginal propensity to consume.

• A)C = a + MPC(1 - t)YD
• B)C = a - (1 - t)YD
• C)C = a + MPC ∙ Y
• D)C = a + MPC ∙ t ∙ YD
• E)C = a + MPC(1 - t)Y

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Definitions:

Liver

A large, vital organ in the body responsible for processes such as detoxification, metabolism, and the production of biochemicals necessary for digestion.

Thoracic Aorta

The section of the aorta that passes through the thoracic cavity, supplying oxygen-rich blood to the chest and upper abdominal area.

Thoracic Organs

Thoracic organs refer to those housed in the thoracic cavity, including the heart, lungs, esophagus, and major blood vessels.

Posterior Tibial Artery

A major artery of the lower leg, supplying blood to the posterior compartment of the leg and plantar surface of the foot.