If the Consumption Function Is Defined as C = 7,250

question 152

Multiple Choice

If the consumption function is defined as C = 7,250 + 0.8Y, what is the multiplier?

• A)0.2
• B)0.8
• C)1.25
• D)5
• E)10

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Definitions:

Liabilities

Financial obligations or debts that a company owes to external parties.

Residual Equity

The amount of equity remaining for shareholders after all liabilities have been deducted from total assets.

Owner's Equity

The assets left over in a business once liabilities are cleared, showing the equity of owners or shareholders.

Spoils

Goods that are damaged or unusable during the production process and cannot be sold to customers.