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    Exam 10: Keynesian Macroeconomics and Economic Instability: A Critique of the Self-Regulating Economy
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    Here Is a Consumption Function: C = C<sub>0</sub> + MPC(Y<sub>d</sub>)
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Here Is a Consumption Function: C = C0 + MPC(Yd)

Question 56

Question 56

Multiple Choice

Here is a consumption function: C = C0 + MPC(Yd) .If C0 = $200,then we know that


A) if Yd is zero, C will be $200.
B) when Yd rises, C rises by $200.
C) when Yd falls, C falls by MPC times C0.
D) C will always equal C0.

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