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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 91

Question 91

Multiple Choice

Here is a consumption function: C = C0 + MPC(Yd) .If MPC is 0.75,then we know that


A) as Yd rises by $1,Co rises by $0.75.
B) as Yd rises by $1,C rises by $0.75.
C) Yd rises by $0.75.
D) as C0 rises by $0.75,Yd rises by $1.

Correct Answer:

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