Which of the following equations correctly represents the data below? A) Y_d = 40 + .6C B) C = 60 + .4Y_d C) C = 40 + .6Y_d D) C = .6Y_d

Question

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The equation should represent the relationship between the two variables shown in the data, which are C (consumption) and Y_d (income). The correct equation should have a positive coefficient for income, indicating that as income increases, consumption also increases. Option A has the correct relationship, but the intercept is incorrect (it should be 60, not 40). Option B has the intercept reversed (it should be 40, not 60). Option D only includes income and does not account for any constant term. Option C has the correct relationship and intercept, making it the best choice.

Which of the Following Equations Correctly Represents the Data Below