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

question 178

Multiple Choice

Here is a consumption function: C = C₀ + MPC(Y_d) .If C₀ = $300,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 $300.
• C)as C₀ rises by $15,C rises by $15.
• D)as C₀ rises by $15,Y_d rises by $15.

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Definitions:

Issued

refers to securities, stocks, or bonds that have been officially released or sold by a company to investors.

Retained Earnings

Refers to the portion of net income left over for the business after it has paid out dividends to its shareholders.

Surplus Cash

Excess funds that a company has after covering all its operational expenses, investments, and financial obligations.

Dividends

Distributions to shareholders from a corporation, often sourced from the entity's earnings.