Assume that the consumption function is C = 100 + 0.8Y, income (Y) is $1,000 billion, and investment I is $50 billion, then the unplanned inventory change will be $ _______ billion.

Name: Assume that the consumption function is C = 100 + 0.8Y, income (Y) is $1,000 billion, and investment I is $50 billion, then the unplanned inventory change will be $ _______ billion.
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Question

Quizplus · Accepted Answer

Unplanned inventory change = Y - (C + I) = 1000 - (100 + 0.8*1000 + 50) = 50

Assume That the Consumption Function Is C = 100