Table 6.3
-Refer to Table 6.3. The equation representing the consumption schedule for the above economy is:
A) C = 120 + 0.8Y.
B) C = 60 + 0.6Y.
C) C = 60 + 0.5Y.
D) C=60.

Question

Table 6.3
-Refer to Table 6.3. The equation representing the consumption schedule for the above economy is:
A) C = 120 + 0.8Y. 
B) C = 60 + 0.6Y. 
C) C = 60 + 0.5Y. 
D) C=60.

Quizplus · Accepted Answer

The consumption schedule equation is typically in the form C = a + bY, where 'a' is autonomous consumption and 'b' is the marginal propensity to consume (MPC). Based on the options, B) C = 60 + 0.6Y fits this form, assuming '60' is the autonomous consumption and '0.6' is the MPC.

Table 6.3 -Refer to Table 6.3. the Equation Representing the Consumption Schedule