Given the Consumption Function C = $500 Billion + 0

question 204

Multiple Choice

Given the consumption function C = $500 billion + 0.80Y, an increase in disposable income from $6,000 billion to $7,000 billion will cause consumption to increase by:

• A)$800 billion.
• B)$1,000 billion.
• C)$1,300 billion.
• D)$1,500 billion.
• E)$1,800 billion.

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Definitions:

Reliability

The degree to which an assessment tool or measurement consistently produces stable and accurate results across different occasions.

Black Markets

Illicit trade practices where goods or services are exchanged illegally, bypassing governmental regulations or price controls.

Legal Markets

Markets operating within the framework of regulatory laws and norms, where transactions of goods and services occur legally.

Supply and Demand

The fundamental economic model that describes the interaction between the availability of a particular product and the desire for that product, determining its price.