Consider a Consumption Function of the Following Form: C =

question 52

Multiple Choice

Consider a consumption function of the following form: C = 50 + (0.6) Y_D. At what level of disposable income will desired savings be equal to zero?

• A)50
• B)125
• C)31.25
• D)83.33
• E)208.33

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Definitions:

IFRS

Stands for International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) for global use.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) in the cost of a product.

FIFO

First-In, First-Out, an inventory valuation method where goods purchased first are sold first.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set.