If the Consumption Function Is Given by C = 500

question 79

Multiple Choice

If the consumption function is given by C = 500 + 0.5(Y - T) , and Y is 6,000 and T is given by T = 200 + 0.2Y, then C equals:

• A) 2,500.
• B) 2,800.
• C) 3,500.
• D) 4,200.

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Definitions:

Lenders

Individuals, organizations, or institutions that provide funds to borrowers under the agreement that the funds will be repaid with interest at a later date.

Fixed Incomes

Financial incomes that are set at a particular figure and do not fluctuate in the short term, such as bonds or pensions.

High Inflation

A period during which prices for goods and services rise excessively, eroding purchasing power.

Purchasing Power

The ability of an individual or group to buy goods and services, often considered in terms of the amount of goods and services that one unit of currency can buy.