Here Is a Consumption Function: C = C₀ + MPC(Y_d)

question 178

Multiple Choice

Here is a consumption function: C = C₀ + MPC(Y_d) .If C₀ = $300,then we know that

• A)if Y_d rises by $1,then Co rises by $1.
• B)if Y_d rises by $1,then C rises by $300.
• C)as C₀ rises by $15,C rises by $15.
• D)as C₀ rises by $15,Y_d rises by $15.

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Definitions:

Issue Price

The price at which new shares, bonds, or other securities are offered to the public or the holders.

Cash Dividend

A payment of profits by a company to its shareholders in the form of cash, typically issued on a quarterly basis.

Liability

A financial obligation or debt owed by a business to another entity.

Participating Preferred Stock

A type of preferred stock that provides holders the right to dividend payments exceeding the basic fixed rate if the company meets specified financial performance criteria.