The Aggregate Consumption Function Is C = 200 + 0

question 177

Multiple Choice

The aggregate consumption function is C = 200 + 0.9Yd. If income is $1,500 and net taxes are $300, consumption equals

• A) 1,280.
• B) 1,820.
• C) 2,000.
• D) 2,180.

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Definitions:

Operating Budget

A detailed projection of all expected income and expenses based on forecasted sales revenue during a given period, typically a fiscal year.

Accounts Receivable

Amounts owed by customers on account.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, often used to assess liquidity and cash requirements.

Financing Section

A part of the cash flow statement that shows the net flows of cash used to fund the company’s capital expenditures and financial investments.