$$\begin{array} { | c | c | c | }
\hline \text { GDP } ( Y ) & \text { Consumption } ( C ) & \text { Investment (I) } \
\hline \$ 0 & \$ 60 & \$ 30 \
\hline 100 & 120 & 40 \
\hline 200 & 180 & 50 \
\hline 300 & 240 & 60 \
\hline 400 & 300 & 70 \
\hline 500 & 360 & 80 \
\hline
\end{array}$$ (Advanced analysis) The table gives data for a private closed economy. The letters Y, C, S, and I are used to represent real GDP, consumption, saving, and investment, respectively. The equation
Representing the consumption schedule for the economy is
A) C = Y ? 0.6S.
B) Y = C + S.
C) C = 60 + 0.4Y.
D) C = 60 + 0.6Y.

Question

$$\begin{array} { | c | c | c | } 
\hline \text { GDP } ( Y ) & \text { Consumption } ( C ) & \text { Investment (I) } \
\hline \$ 0 & \$ 60 & \$ 30 \
\hline 100 & 120 & 40 \
\hline 200 & 180 & 50 \
\hline 300 & 240 & 60 \
\hline 400 & 300 & 70 \
\hline 500 & 360 & 80 \
\hline
\end{array}$$ (Advanced analysis) The table gives data for a private closed economy. The letters Y, C, S, and I are used to represent real GDP, consumption, saving, and investment, respectively. The equation
Representing the consumption schedule for the economy is
A) C = Y ? 0.6S.
B) Y = C + S.
C) C = 60 + 0.4Y.
D) C = 60 + 0.6Y.

Quizplus · Accepted Answer

The consumption schedule equation represents the relationship between real GDP and consumption. The equation C = 60 + 0.6Y indicates that consumption (C) is a function of real GDP (Y), where consumption increases by 0.6 for every increase of 1 in real GDP. The constant term of 60 represents the autonomous consumption, which is the amount of consumption that does not depend on income. Therefore, D is the best choice as it represents the consumption schedule equation for the given economy.

(Advanced Analysis) the Table Gives Data for a Private Closed