Use the following to answer questions .
Exhibit: Consumption and Real GDP
-(Exhibit: Consumption and Real GDP) An equation for the consumption function is
A) C = 1 + Y.
B) C = Y.
C) C = 1 + 2Y.
D) C = 1 + 0.5Y.

Question

Use the following to answer questions .
Exhibit: Consumption and Real GDP 
-(Exhibit: Consumption and Real GDP) An equation for the consumption function is
A) C = 1 + Y. 
B) C = Y. 
C) C = 1 + 2Y. 
D) C = 1 + 0.5Y.

Quizplus · Accepted Answer

The consumption function equation shown in the exhibit is C = 1 + 0.5Y, which indicates that consumption (C) is equal to 1 plus half of the real GDP (Y). Therefore, option D is the correct choice.

Use the Following to Answer Questions