Here Is a Consumption Function: C = C₀ + MPC(Y_d)

question 6

Multiple Choice

Here is a consumption function: C = C₀ + MPC(Y_d) .If MPC is 0.80,then we know that

• A) as Y_d rises by $1,Co rises by $0.80.
• B) as Y_d rises by $1,C rises by $0.80.
• C) Y_d rises by $0.80.
• D) as C₀ rises by $0.80,Y_d rises by $1.

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Definitions:

Social Security

A federal government program in the United States that provides retirement, disability, and survivors' benefits to eligible individuals.

Contributory Program

A social program financed through the contributions of its participants, often via taxes or premiums, providing benefits based on those contributions.

Social Security

A government program that provides financial assistance to people who are retired, disabled, or otherwise eligible for benefits based on their earnings records.

Income Percentage

The proportion of a person's or entity's income relative to a specific benchmark or total income, often used in financial analysis and planning.