Refer to the information provided in Figure 23.3 below to answer the question(s) that follow. Figure 23.3
-Refer to Figure 23.3. The equation for the aggregate consumption function is
A) C = 140 + 0.5Y.
B) C = 60 + 0.7Y.
C) C = 80 + 0.6Y.
D) C = 60 + 0.4Y.

Question

Refer to the information provided in Figure 23.3 below to answer the question(s) that follow.  Figure 23.3
-Refer to Figure 23.3. The equation for the aggregate consumption function is
A) C = 140 + 0.5Y. 
B) C = 60 + 0.7Y. 
C) C = 80 + 0.6Y. 
D) C = 60 + 0.4Y.

Quizplus · Accepted Answer

In Figure 23.3, the consumption function is represented by the line labeled "C". The intercept of this line is 60, indicating that even if income is zero, consumption will still be 60. The slope of the line is 0.7, indicating that for every one-unit increase in income, consumption will increase by 0.7 units. Therefore, the equation for the consumption function is C = 60 + 0.7Y.

Refer to the Information Provided in Figure 23