If the Consumption Function Is C = 200 + 0

question 176

Multiple Choice

If the consumption function is C = 200 + 0.75Y and there is a $10 million increase in consumption spending, then the aggregate demand curve will shift horizontally to the right by:

• A) $750 million.
• B) $7.5 million.
• C) $75 million.
• D) $40 million.

---

Definitions:

Finished Goods

Finished goods are completed products ready for sale, having passed through all stages of production and manufacturing.

Direct Labor Cost

The expense associated with labor directly involved in the production process of goods or services, distinguishing from indirect labor costs like maintenance personnel.

Materials Used

The quantity and cost of raw materials consumed in the production process, including both direct and indirect materials.

Manufacturing Overhead Account

An accounting term that aggregates all indirect costs associated with manufacturing a product.