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1. Suppose that the MPC is equal to 0.8 and autonomous consumption spending is 400. Then the consumption function is given by a. C = 400 - 0.8Yd b. C = -400 + 0.2Yd c. C = 320 x Yd d. C = 400 + 0.8Yd e. C = 400 + 0.2Yd 2. Suppose th

1.

Suppose that the MPC is equal to 0.8 and autonomous consumption spending is 400. Then the consumption function is given by


a.

C = 400 - 0.8Yd


b.

C = -400 + 0.2Yd


c.

C = 320 x Yd


d.

C = 400 + 0.8Yd


e.

C = 400 + 0.2Yd

2.

Suppose that the MPC is equal to 0.8 and autonomous consumption spending is 400. At what level of income is saving = 0?


a.

400


b.

500


c.

2000


d.

320


e.

1200

3.

The saving function


a.

. is an upward-sloping straight line with a vertical intercept of -C0 and a slope of (1 - b).


b.

shows that in some ranges of income saving may be negative.


c.

is given by the equation S = -C0 + (1 - b)Yd


d.

can be derived from the consumption function.


e.

all of the above


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Answer #1

MPC = 0,8 c = 400 - Consumption Furictions c = where c +/MPCX Yd) c Autonomous Consumption MPC: Marginal Propersity to corsimsavings Function: 3 = -ct -6 Yd where si ci Il-b) d sawings Autonomous consumption : MPS jeli-Mec). . Disposable income. s= -- cottlob do Slope 7 & AS sang - cos Usposabte Disposable home oncome 4 option se) All of the above Correct twower, Explanati


answered by: Bhargav Agravat
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1. Suppose that the MPC is equal to 0.8 and autonomous consumption spending is 400. Then the consumption function is given by a. C = 400 - 0.8Yd b. C = -400 + 0.2Yd c. C = 320 x Yd d. C = 400 + 0.8Yd e. C = 400 + 0.2Yd 2. Suppose th
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