Use the Information Below to Answer the Following Questions

question 101

Multiple Choice

Use the information below to answer the following questions.
Fact 27.5.2
The economy of Tinseltown has a consumption function of C = 15 + 0.7Y , investment equal to 8, government expenditure equal to 12, exports equal to 20, and an import function of M = 0.2Y.
-Refer to Fact 27.5.2. What is consumption expenditure in equilibrium in this economy?

• A)35.25
• B)62
• C)53.5
• D)77
• E)92

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Definitions:

Depreciation

Depreciation is the method of allocating the cost of a tangible or physical asset over its useful life.

Salvage Value

An asset's forecasted residual value once it has fulfilled its period of usefulness.

Sales

The total amount of revenue generated from the sale of goods or services by a company.

Net Present Value Method

A financial analysis tool used to evaluate the profitability of an investment by determining the present value of expected future cash flows.