Suppose the Consumption Function Is Given by the Equation C

question 261

Multiple Choice

Suppose the consumption function is given by the equation C = 100 + 0.8YD, where YD is disposable income. What is the multiplier in this economy?

• A) 5
• B) 2
• C) 0.8
• D) 0.2

---

Definitions:

Sunflower Seeds

Edible seeds from the sunflower plant, often eaten as a snack, used in recipes, or processed for their oil.

Chemicals

Chemicals are substances formed from chemical reactions between elements or compounds, and they have specific chemical compositions and properties.

Production Possibilities

Different combinations of goods and services that an economy can produce using all of its resources efficiently.

Opportunity Costs

The cost of forgoing the next best alternative when making a decision, representing the potential benefits an individual, investor, or business misses out on when choosing one alternative over another.