You Are Given the Following Information About the Canadian Economy

question 88

Multiple Choice

You are given the following information about the Canadian economy. Autonomous consumption expenditure is $50 billion, investment is $200 billion, and government expenditure is $250 billion. The marginal propensity to consume is 0.7 and net taxes are $250 billion. Net taxes are assumed to be constant and not vary with income. Exports are $500 billion and imports are $450 billion. The consumption function in billions of dollars is

• A)C = 50 + 0.7Y.
• B)C = 0.7(Y - 250).
• C)C = 50 + 0.7(Y - 250).
• D)C = 50 + 0.7(YD - 250).
• E)C = 50 + 0.7Y - 250.

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Definitions:

Binomial Expansion

The process of expanding an expression raised to a power into a series using binomial theorem.

Coefficient

A numerical or constant quantity placed before and multiplying the variable in an algebraic expression.

Binomial Expansion

The process of expanding an expression that is raised to a finite power and expressed as a sum of terms using the binomial theorem.

Binomial Coefficient

A number that represents the coefficients in the expansion of a binomial raised to a power, usually expressed as nCk or C(n, k).