What Are the Marginal Propensity to Consume and Level of Autonomous

question 33

Multiple Choice

What are the marginal propensity to consume and level of autonomous consumption spending for a consumption function of the following form: C = 1,200 + 0.5DI?

• A) The marginal propensity to consume is 0.5;autonomous consumption spending is $0.50.
• B) The marginal propensity to consume is 0.5;autonomous consumption spending is $1,200.
• C) The marginal propensity to consume is 1,200;autonomous consumption spending is $0.50.
• D) The marginal propensity to consume is 1,200;autonomous consumption spending is $600.
• E) There is insufficient information to answer this.

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Definitions:

Simone de Beauvoir

A 20th-century French philosopher and writer, known for her significant contributions to existentialism and feminism, notably through her work "The Second Sex".

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A metaphor introduced by Adam Smith to describe the self-regulating behavior of the marketplace.

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An ancient Greek philosopher and polymath whose writings covered many subjects and laid the groundwork for much of Western philosophy and science.