Which of the following describes the consumption function in the IS curve?
A) $C _ { t } = \bar { a } _ { c }$
B) $C _ { t } = \bar { a } _ { c } \bar { Y } _ { t } + \bar { b } R _ { t }$
C) $C _ { t } = \bar { a } _ { c } \tilde { Y } _ { t } - \bar { b } R _ { t }$
D) $C _ { t } = \bar { a } _ { c } \bar { Y } _ { t }$
E) $C _ { t } = \bar { a } _ { c } \tilde { Y } _ { t }$

Question

Quizplus · Accepted Answer

The consumption function in the IS curve is given by $C _ { t } = \bar { a } _ { c } \bar { Y } _ { t }$, where $\bar { a } _ { c }$ is the marginal propensity to consume and $\bar { Y } _ { t }$ is disposable income.

Which of the Following Describes the Consumption Function in the IS