Multiple Choice
The equation C = 35 + .75Y, where C is consumption and Y is disposable income, tells us that:
A) households will consume three-fourths of whatever level of disposable income they receive.
B) households will consume $35 if their disposable income is zero and will consume three-fourths of any increase in disposable income they receive.
C) there is an inverse relationship between disposable income and consumption.
D) households will save $35 if their disposable income is zero and will consume three-fourths of any increase in disposable income they receive.
Correct Answer:
Verified
Correct Answer:
Verified
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