Let the Consumption Function Be Given by C = 80

question 24

Multiple Choice

Let the consumption function be given by C = 80 + 0.9YDP with permanent disposable income specified according to YDP = 0.5YD + 0.3YD-1) + 0.2YD-2) . Two years after a permanent increase in income of $1,000, consumption will have increased by

• A) $1,000.
• B) $900.
• C) $800.
• D) $720.
• E) $80.

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Definitions:

Joint Venture

A business arrangement where two or more parties agree to pool their resources for the purpose of accomplishing a specific task or business activity.

Repatriation

The process of returning a person to their country of origin or citizenship, often used in the context of employees returning home after international assignments.

Foreign Assignments

Work tasks or roles allocated to employees in a location outside of their home country, typically as part of international business operations.

Parent Company

A corporation that owns enough voting stock in another firm to control its management and operations by influencing or electing its board of directors.