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

question 171

Multiple Choice

Here is a consumption function: C = C₀ + MPC(Y_d) .If MPC is 0.95,then we know that

• A)as Y_d rises by $1,Co rises by $0.95.
• B)as Y_d rises by $1,C rises by $0.95.
• C)Y_d rises by $0.95.
• D)as C₀ rises by $0.05,Y_d rises by $1.

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