The aggregate consumption function is C = 1,200 + 0.4Yd. If income is $3,000 and net taxes are $400, consumption equals

Name: The aggregate consumption function is C = 1,200 + 0.4Yd. If income is $3,000 and net taxes are $400, consumption equals
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To find consumption (C), first calculate disposable income (Yd) by subtracting net taxes from income: Yd = $3,000 - $400 = $2,600. Then, plug Yd into the consumption function: C = 1,200 + 0.4($2,600) = 1,200 + 1,040 = $2,240.

The Aggregate Consumption Function Is C = 1,200 + 0