Here is a consumption function: C = C0 + MPC(Yd) .Which of the following is true about the consumption function?
A) Consumption will rise if autonomous consumption or disposable income rise.
B) Consumption will fall if autonomous consumption falls or if the MPC rises.
C) Consumption will rise if autonomous consumption rises, MPC declines, or disposable income rises.
D) For every $1 rise in autonomous consumption, consumption will also rise by $1.
E) a and d
Correct Answer:
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