(Advanced analysis)Answer the question on the basis of the following data for a private closed economy.The letters Y,C,S,and I are used to represent real GDP,consumption,saving,and investment respectively. $\begin{array}{ccc}
\underline{\text { GDP }(Y)} & \underline{\text { Consumption (C) }} & \underline{\text { Investment (I) }} \
\$ \$ 0 & \$ 60 & \$ 30 \
100 & 120 & 40 \
200 & 180 & 50 \
300 & 240 & 60 \
400 & 300 & 70 \
500 & 360 & 80
\end{array}$ The equation representing the consumption schedule for the economy is:
A) C = Y - .6S.
B) Y = C + S.
C) C = 60 + .4Y.
D) C = 60 + .6Y.

Question

Quizplus · Accepted Answer

The consumption schedule equation represents the relationship between real GDP (Y) and consumption (C) for the economy. The equation given is C = 60 + .6Y, which suggests that consumption is composed of two parts: a fixed component (60) and a variable component (0.6Y) that is proportional to real GDP. This equation is consistent with the Keynesian consumption function, which states that consumption is a function of disposable income. The correct answer is therefore D.

(Advanced Analysis)Answer the Question on the Basis of the Following