If the consumption function is C = 25 + 0.9y and income increases by $100, then consumer spending will increase by
A) $10.
B) $25.
C) $90.
D) $115.

Question

Quizplus · Accepted Answer

The consumption function C = 25 + 0.9y shows that for every $1 increase in income (y), consumption (C) increases by $0.9. Therefore, if income increases by $100, consumer spending will increase by 0.9 * $100 = $90.

If the Consumption Function Is C = 25 + 0