Refer to the information provided in Table 23.4 below to answer the question(s) that follow.
Table 23.4
-Refer to Table 23.4. Assuming society's MPC is constant, at an aggregate income level of $1,200, aggregate consumption would be
A) $2,000.
B) $1,400.
C) $1,100.
D) $950.

Question

Refer to the information provided in Table 23.4 below to answer the question(s) that follow.
Table 23.4 
-Refer to Table 23.4. Assuming society's MPC is constant, at an aggregate income level of $1,200, aggregate consumption would be
A) $2,000. 
B) $1,400. 
C) $1,100. 
D) $950.

Quizplus · Accepted Answer

The MPC is the change in consumption divided by the change in income. From Table 23.4, we can see that the MPC is 0.5. At an aggregate income level of $1,200, aggregate consumption would be $1,200 x 0.5 = $600. However, we need to add back the autonomous consumption of $500 to get the total aggregate consumption of $1,100.

Refer to the Information Provided in Table 23