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

question 9

Multiple Choice

Here is a consumption function: C = C₀ + MPC(Y_d) .If consumption is $2,000,MPC =0.75,and disposable income is $2,000,what does autonomous consumption equal?

• A)$950
• B)$3,500
• C)$500
• D)$4,500
• E)none of the above

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Definitions:

Proportionate Increases

Situations where variables increase by the same percentage, maintaining their relative proportion to one another.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a specified time period.

Agricultural Products

Goods produced through farming and agriculture, such as crops and livestock.

Labor Force

The total number of people employed or actively seeking employment in a country or specific economic sector.