Household final consumption is assumed to be represented by the following function: C = 120 + 0.9Y

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Household final consumption is assumed to be represented by the following function:
C = 120 + 0.9Y

Questions:
1. What do C and Y represent?

2. What do the numbers 120 and 0.9 correspond to?

3. Calculate the impact on consumption of a 55 increase in disposable income.

4. Deduce the average propensity to consume for Y = 1400 then Y = 2000.

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Related Book For answer-question

Precalculus

ISBN: 978-0321716835

9th edition

Authors: Michael Sullivan

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Posted Date: Jan 08, 2024 04:26 AM

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Household final consumption is assumed to be represented by the following function: C = 120 + 0.9Y

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Solution Breakdown of the Household Consumption Function 1 C and Y C represents household final consumption which is the total amount of spending by h... View the full answer

Precalculus

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