FIGURE 21-2
-Refer to Figure 21-2. Which of the following is the correct equation for the consumption function depicted in the figure?
A) C = 500 + 2/3)YD
B) C = 0.5)YD
C) C = 1000 + 2/3)YD
D) C = 500 + 0.5)YD
E) C = 2000 + 2/3)YD

Question

FIGURE 21-2
-Refer to Figure 21-2. Which of the following is the correct equation for the consumption function depicted in the figure?
A) C = 500 + 2/3)YD 
B) C = 0.5)YD 
C) C = 1000 + 2/3)YD 
D) C = 500 + 0.5)YD 
E) C = 2000 + 2/3)YD

Quizplus · Accepted Answer

The consumption function is given by the equation C = 500 + 0.5)YD, as it intersects the vertical axis at 500 and has a slope of 0.5, indicating that consumption increases by $0.50 for every $1 increase in disposable income.

FIGURE 21-2 -Refer to Figure 21-2. Which of the Following Is the Is