(Advanced Analysis)Answer the Question on the Basis of the Following

question 124

Multiple Choice

(Advanced analysis) Answer the question on the basis of the following data for a private closed economy.The letters Y,C,S,and I are used to represent real GDP,consumption,saving,and investment respectively. $\begin{array}{ccc}\underline{\text { GDP }(Y) } & \underline{\text { Consumption (C) }} & \underline{\text { Investment (I) }} \\\$ \$ 0 & \$ 60 & \$ 30 \\100 & 120 & 40 \\200 & 180 & 50 \\300 & 240 & 60 \\400 & 300 & 70 \\500 & 360 & 80\end{array}$ The equation representing the consumption schedule for the economy is:

• A) C = Y - .6S.
• B) Y = C + S.
• C) C = 60 + .4Y.
• D) C = 60 + .6Y.

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Definitions:

Threshold

The minimum level of stimulus or condition required to activate a process or cause a specific effect.

Redistributing Income

The process of realigning the distribution of wealth or income in a society, often through taxation and government spending aimed at reducing inequalities.

Society's Total Utility

The cumulative measure of satisfaction or happiness that a society derives from consuming a particular amount of goods and services.

Diminishing Marginal Utility

A principle stating that as a consumer consumes more of a good or service, the satisfaction (utility) gained from each additional unit decreases.