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:

Recyclable Components

Parts of a product that can be processed and used again in the manufacturing of new products, reducing the need for raw materials.

Purchases

Transactions involving the buying of goods and services, either for consumption, use in production, or resale.

Accounts Payable

The amount of money that a company owes to its suppliers or creditors for goods and services received.

Transaction Costs

Expenses incurred during the process of buying or selling goods and services, which can include fees, taxes, and other related costs.