If the Equation C = 20

question 168

Multiple Choice

If the equation C = 20 + .6Y, where C is consumption and Y is disposable income, were graphed:

• A)the vertical intercept would be +.6 and the slope would be +20.
• B)it would reveal an inverse relationship between consumption and disposable income.
• C)the vertical intercept would be negative, but consumption would increase as disposable income rises.
• D)the vertical intercept would be +20 and the slope would be +.6.

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Definitions:

Probability Density Functions

Mathematical functions that describe the likelihood of a continuous random variable taking on a particular value.

Continuous Random Variables

Variables capable of assuming countless values within a specified range.

Normal Probability Distribution

A continuous probability distribution characterized by a symmetrical bell-shaped curve, where the mean, median, and mode are all equal.

Standard Normal Distribution

A probability distribution that has a mean of zero and a standard deviation of one, also represented by the standard normal curve.