If the equation C = 20 + .6Y, where C is consumption and Y is disposable income, were graphed:
A)the vertical intercept would be +.6 and the slope would be +20.
B)it would reveal an inverse relationship between consumption and disposable income.
C)the vertical intercept would be negative, but consumption would increase as disposable income rises.
D)the vertical intercept would be +20 and the slope would be +.6.

Question

Quizplus · Accepted Answer

The equation C = 20 + .6Y represents a positive relationship between consumption (C) and disposable income (Y). The intercept of the graph would be 20 on the y-axis, indicating that even with no disposable income, there is still a base level of consumption. The slope of the graph would be .6, indicating that for every additional dollar of disposable income, consumption increases by .6 dollars. Therefore, the correct answer is D.

If the Equation C = 20