Multiple Choice
What are the marginal propensity to consume and level of autonomous consumption spending for a consumption function of the following form: C = 1,200 + 0.5DI?
A) The marginal propensity to consume is 0.5;autonomous consumption spending is $0.50.
B) The marginal propensity to consume is 0.5;autonomous consumption spending is $1,200.
C) The marginal propensity to consume is 1,200;autonomous consumption spending is $0.50.
D) The marginal propensity to consume is 1,200;autonomous consumption spending is $600.
E) There is insufficient information to answer this.
Correct Answer:
Verified
Correct Answer:
Verified
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