Figure 3-1
-Employing Figure above, autonomous consumption expenditures are ________, and the marginal propensity to consume is ________.

Question

Figure 3-1 
-Employing Figure above, autonomous consumption expenditures are ________, and the marginal propensity to consume is ________.

Quizplus · Accepted Answer

Autonomous consumption expenditures are represented by the y-intercept of the consumption function, which is $200 billion in this case. The marginal propensity to consume is the slope of the consumption function, which can be calculated by dividing the change in consumption expenditures by the change in disposable income. In this case, the change in consumption expenditures is $300 billion ($800 billion - $500 billion) and the change in disposable income is $500 billion ($1000 billion - $500 billion), resulting in a marginal propensity to consume of 0.6 (or 60%). Therefore, the correct answer is C: 200; 0.6.

Figure 3-1 -Employing Figure Above, Autonomous Consumption Expenditures Are ________, and the ________

Figure 3-1 -Employing Figure Above, Autonomous Consumption Expenditures Are , and the