The Aggregate Consumption Function Is C = 1,000 + 0

question 252

Multiple Choice

The aggregate consumption function is C = 1,000 + 0.9Yd. If income is $3,600 and net taxes are $600, consumption equals

• A) 2,400.
• B) 3,400.
• C) 3,700.
• D) 4,000.

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Definitions:

Expected Return

The average return anticipated on an investment, factoring in the probabilities of each possible outcome.

Constant Rate

A fixed percentage or value used in calculations, often assumed in models forecasting growth or decay over time.

Required Rate of Return

The least annual percentage profit that must be earned by an investment to draw interest from companies or individuals into a given security or scheme.

Projected Increase

An estimate or forecast of the amount by which a specific metric, such as revenue or population, is expected to grow over a certain period of time.