If C = $3,000 + 0.9Y, which of the following will not be true?
A)If income is less than $30,000, saving must be negative.
B)If income is $30,000, then consumers are not saving.
C)If income equals $40,000, saving must be $0.
D)The marginal propensity to consume is 0.9.
E)Autonomous consumption is $3,000.

Question

Quizplus · Accepted Answer

If income equals $40,000, consumption will be $3,000 + 0.9($40,000) = $39,000, leaving $1,000 for saving, not $0.