(Advanced analysis) If the equation C = 20 + 0.6Y, where C is consumption and Y is disposable income, were graphed,
A) the vertical intercept would be +0.6 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 +0.6.

Question

Quizplus · Accepted Answer

The equation C = 20 + 0.6Y has a vertical intercept of +20, indicating that even if disposable income (Y) is zero, there is still some consumption (C) occurring. The slope is +0.6, indicating that for every increase in disposable income of $1, consumption will increase by $0.60. Therefore, as disposable income rises, consumption will also increase. This relationship is direct, not inverse.

(Advanced Analysis) If the Equation C = 20 + 0