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9 November, 02:29

Suppose the consumption function is c = $200 + 0.85yd. if disposable income is $400, consumption is

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  1. 9 November, 02:37
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    Given the consumption equation of c = 200 + 0.85yd, and the disposable income of $400, then, then we would get the consumption by substituting the given to the equation:c = 200 + 0.85ydc = 200 + 0.85 (400) c = 200 + 340c = 540Therefore, the consumption is $540.
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