Assume a consumption function of the following form: C = 100 + .8Y. If income is equal to $3,000, then consumption is
A) $2,400.
B) $2,500.
C) $2,900.
D) $3,100.
B
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If ration coupons are used to determine who gets the products available, what happens if the government allows individuals to trade them?
What will be an ideal response?
As the capital-labor ratio increases, break-even investment
A) increases at a decreasing rate. B) increases at an increasing rate. C) increases at a constant rate. D) remains unchanged.
Goods that are rival in consumption, but not excludable are:
A. a common resource. B. a public good. C. an artificially scarce good. D. a private good.
How will a recession in the economies of our foreign trading partners affect US AD?
A. no effect on AD B. AD will increase C. AD will decrease D. depends on whether US offers financial aid to these countries