If the consumption function is expressed as C = a + mpc × Y_D,then "a" represents A)autonomous consumer expenditure. B)the marginal propensity to consume. C)the expenditure multiplier. D)disposable income.

Question

Quizplus · Accepted Answer

"a" represents the autonomous consumer expenditure, which is the amount of consumer spending that is independent of disposable income. It is the intercept of the consumption function, and represents the amount of spending that would occur even if disposable income was zero.

If the Consumption Function Is Expressed as C = a