Refer to the information provided in Figure 8.4 below to answer the questions that follow. Figure 8.4
-Refer to Figure 8.4. If income is Y₁, aggregate consumption is the smallest when the aggregate consumption function is

Question

Refer to the information provided in Figure 8.4 below to answer the questions that follow.

Figure 8.4
-Refer to Figure 8.4. If income is Y₁, aggregate consumption is the smallest when the aggregate consumption function is

Quizplus · Accepted Answer

The intersection point of the income line (Y₁) and the aggregate consumption function is at point E on the graph, where aggregate consumption is highest. Therefore, to find the smallest aggregate consumption, we need to move downwards along the income line until it intersects with the aggregate consumption function at its lowest point. This point is at C₁, so the answer is C.

Refer to the Information Provided in Figure 8