Refer to the information provided in Table 8.3 below to answer the questions that follow.
Table 8.3
-Refer to Table 8.3. The equation for the aggregate consumption function is
A) C = 200 + 0.3Y.
B) C = 200 + 0.75Y.
C) C = 200 + 0.8Y.
D) C = -200 + 0.2Y.

Question

Refer to the information provided in Table 8.3 below to answer the questions that follow.
Table 8.3 
-Refer to Table 8.3. The equation for the aggregate consumption function is
A) C = 200 + 0.3Y. 
B) C = 200 + 0.75Y. 
C) C = 200 + 0.8Y. 
D) C = -200 + 0.2Y.

Quizplus · Accepted Answer

The equation for the aggregate consumption function is C = 200 + 0.75Y, where C is consumption and Y is income. This is derived from the table, where the consumption values for each level of income are given. The slope of the consumption function is 0.75, indicating that for every additional dollar of income, 0.75 dollars are consumed. The intercept of 200 indicates the level of consumption that occurs even when there is no income.

Refer to the Information Provided in Table 8