You Are Given the Following Information About the Canadian Economy

question 88

Multiple Choice

You are given the following information about the Canadian economy. Autonomous consumption expenditure is $50 billion, investment is $200 billion, and government expenditure is $250 billion. The marginal propensity to consume is 0.7 and net taxes are $250 billion. Net taxes are assumed to be constant and not vary with income. Exports are $500 billion and imports are $450 billion. The consumption function in billions of dollars is

• A)C = 50 + 0.7Y.
• B)C = 0.7(Y - 250).
• C)C = 50 + 0.7(Y - 250).
• D)C = 50 + 0.7(YD - 250).
• E)C = 50 + 0.7Y - 250.

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