Given that autonomous consumption equals $1,000,disposable income equals $20,000,and the MPC equals 0.80,the level of
A)Saving equals $4,000.
B)Saving equals $19,000.
C)Consumption equals $17,000.
D)Consumption equals $16,000.

Question

Quizplus · Accepted Answer

Consumption equals $17,000.Explanation:Consumption = Autonomous consumption + MPC * Disposable incomeConsumption = $1,000 + 0.80 * $20,000Consumption = $1,000 + $16,000Consumption = $17,000

Given That Autonomous Consumption Equals $1,000,disposable Income Equals $20,000,and the MPC