-In the above figure, when disposable income equals $12 trillion, induced consumption expenditure equals

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Quizplus · Accepted Answer

Induced consumption expenditure is the portion of consumption that changes with income. If disposable income is $12 trillion and assuming a marginal propensity to consume (MPC) less than 1, induced consumption would be the disposable income minus autonomous consumption. If autonomous consumption is not given, it is typically assumed to be zero for such questions, making induced consumption equal to disposable income minus any savings, which is $10.8 trillion if MPC is 0.9.

-In the Above Figure, When Disposable Income Equals $12 Trillion