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Aggregate Demand, Consumption & Saving · Question 10 of 60

Question 10

EasyOriginal question

In the consumption function C = c̄ + bY, c̄ is

Options for question 10

Show the answer and explanation
CorrectNot quiteAnswer C

Correct answer: C

Explanation

  1. Even at zero income people must eat, financing it from past savings or borrowing.

  2. b is the MPC, the slope of the consumption line.

Concept
Autonomous consumption
Typical time
40 s
Your time
—
The rule this testsThe consumption function
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