If the Consumption Function Is Defined as C = 5,500

question 193

Multiple Choice

If the consumption function is defined as C = 5,500 + 0.9Y,what is the value of the multiplier?

• A)0.1
• B)0.9
• C)9
• D)10

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Definitions:

Lobby

The act of attempting to influence the decisions of government officials, typically by special interest groups.

Binding Price Ceiling

A maximum price set by the government below the equilibrium price, preventing suppliers from raising the price above it, leading to shortages.

Surplus

The situation in which the quantity of a good supplied exceeds the quantity demanded, often resulting in downward pressure on prices.

Price Ceiling

A legally established maximum price that can be charged for a good or service, aimed at preventing prices from becoming too high.