If We Write the Consumption Function As $C _ { t } / \bar { Y } _ { t } = \bar { a } _ { c } + \bar { x } \tilde { Y } _ { t }$

question 61

Multiple Choice

If we write the consumption function as $C _ { t } / \bar { Y } _ { t } = \bar { a } _ { c } + \bar { x } \tilde { Y } _ { t }$ , if $\bar { x } < 1$
, the IS curve is given by:

• A) \(\tilde { Y } _ { t } = \frac { 1 } { 1 - \bar { x } } \times \left[ \bar { a } - \bar { b } \left( R _ { t } - \bar { r } \right) \right]\)
• B) \(\tilde { Y } _ { t } = ( 1 - \bar { x } ) \times \left[ \bar { a } - \bar { b } \left( R _ { t } - \bar { r } \right) \right]\)
• C) \(\tilde { Y } _ { t } = \bar { a } - \bar { b } \left( R _ { t } - \bar { r } \right)\)
• D) \(\tilde { Y } _ { z } = \bar { x } \times \left[ \bar { a } - \bar { b } \left( R _ { t } - \bar { r } \right) \right]\)
• E) \(\tilde { Y } _ { t } = \frac { 1 } { \bar { x } } \times \left[ \bar { a } - \bar { b } \left( R _ { t } - \bar { r } \right) \right]\)

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Definitions:

Bond Sinking Fund

A financial strategy to set aside funds over time for the eventual repayment of the principal amount of bonds, ensuring the issuer can meet its future obligations.

Asset

An economic resource owned or controlled by a business or an individual that is expected to provide future benefits.

Cost of Retirement

The total expenses incurred when an individual stops working and enters retirement, including living and healthcare costs.