Suppose the Consumption Function Is Given by the Equation C

question 261

Multiple Choice

Suppose the consumption function is given by the equation C = 100 + 0.8YD, where YD is disposable income. What is the multiplier in this economy?

• A) 5
• B) 2
• C) 0.8
• D) 0.2

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Definitions:

Direct Labor

Labor costs that can be directly traced to the production of specific goods or services.

Standard Costs

Predetermined costs for materials, labor, and overhead, used for budgeting and measuring performance.

Hours

A unit of time equivalent to 60 minutes, often used to track time spent on activities or work performed.

Finished Goods Inventory

Inventory of finished goods available for sale.