If the Consumption Function Is C = 20 + 0

question 65

Multiple Choice

If the consumption function is C = 20 + 0.5YD,then an increase in disposable income by $100 will result in an increase in consumer expenditure by

• A)$25.
• B)$70.
• C)$50.
• D)$100.

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Definitions:

Merchandise

Goods to be bought and sold in any type of business.

Operating Expenses

The costs associated with running a business’s core activities on a day-to-day basis, including selling, administrative, and other expenses.

Cash Collections

The process or amount of collecting received payments from customers, typically for goods sold or services rendered.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption or wear and tear.