Here Is a Consumption Function: C = C₀ + MPC(Y_d)

question 66

Multiple Choice

Here is a consumption function: C = C₀ + MPC(Y_d) .If C₀ = $4,000,then we know that

• A) if Y_d rises by $1,then Co rises by $1.
• B) if Y_d rises by $1,then C rises by $4,000.
• C) as C₀ rises by $150,C rises by $150.
• D) as C₀ rises by $150,Y_d rises by $150.

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Definitions:

Fair Market Value

The price that property would sell for on the open market between a willing buyer and a willing seller.

Preexisting Duty

An obligation that a party is already legally required to perform, which cannot serve as consideration for a new contract.

Executory Contract

A contract that has not yet been fully performed or completed by one or more parties.

Executory

Pertaining to a contract or agreement in which not all obligations or terms have yet been fulfilled by the involved parties.