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The Diagram Below Shows Desired Aggregate Expenditure for a Hypothetical

question 66

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The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy:
∙ marginal propensity to consume (mpc) = 0.80
∙ net tax rate (t) = 0.15
∙ no foreign trade
∙ fixed price level
∙ all expenditure and income figures are in billions of dollars. The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy: ∙ marginal propensity to consume (mpc) = 0.80 ∙ net tax rate (t) = 0.15 ∙ no foreign trade ∙ fixed price level ∙ all expenditure and income figures are in billions of dollars.   FIGURE 22-3 -Refer to Figure 22-3.Which of the following correctly describes the consumption function for this economy? A) C = 325 + (0.65) Y B) C = 350 + (0.68) Y<sub>D</sub> C) C = 350 + (0.68) Y D) C = 1000 + (0.80)    E) C = 1000 + (0.80) Y FIGURE 22-3
-Refer to Figure 22-3.Which of the following correctly describes the consumption function for this economy?


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