(Advanced Analysis) the Equation C = 35 + 0

question 154

Multiple Choice

(Advanced analysis) The equation C = 35 + 0.75Y, where C is consumption and Y is disposable income, shows that

• A) households will consume three-fourths of whatever level of disposable income they receive.
• B) households will consume $35 if their disposable income is zero and will consume three- fourths of any increase in disposable income they receive.
• C) there is an inverse relationship between disposable income and consumption.
• D) households will save $35 if their disposable income is zero and will consume three-fourths of any increase in disposable income they receive.

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Definitions:

Descriptions

Refer to the detailed explanation or illustration of the nature, properties, or functioning of something.

Control Group

In experimental research, a group of subjects that do not receive the experimental treatment, serving as a comparison for evaluating the effect of the treatment.

Experimental Treatment

A procedure or therapy that is being tested and has not yet been proven effective.

Autonomy

The capability of an individual or system to make decisions independently, without external influence or control.