Answered step by step
Verified Expert Solution
Question
1 Approved Answer
26. Suppose we draw the consumption function for a two-sector 2 points economy, with disposable income, Yd, on the horizontal axis and planned consumption,
26. Suppose we draw the consumption function for a two-sector 2 points economy, with disposable income, Yd, on the horizontal axis and planned consumption, C, on the vertical axis. Suppose we also add a 45 line through the origin, and find that the consumption function intersects this at a Yd equal to K1,000 billion a year. Which of the following statements is false? * The slope of the consumption function at any level of Yd shows the value of MPCD (d=dispossable) at that level of YDIS.b) If YDIS in the economy was 1,000 billion a O year, planned consumer spending would also equal 1,000 billion a year.c) If YDIS in the economy was less than 1,000 billion a year, planned saving would be negative.d) The consumption function must be a straight line If Yd in the economy was K1,000 billion a year, planned consumer spending would also equal K1,000 billion a year. If Yd in the economy was less than K1,000 billion a year, planned saving would be negative. O The consumption function must be a straight line
Step by Step Solution
★★★★★
3.42 Rating (174 Votes )
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started