Multiple choice questions

1)Which of the following best represents the consumption function?

A) consumption = autonomous consumption + (the marginal propensity to consume x disposable income)

B) consumption = disposable income - (autonomous consumption / the marginal propensity to consume)

C) consumption = disposable income x (1 / 1 - the marginal propensity to consume)

D) consumption = autonomous consumption + (the marginal propensity to consume x transfer payments) / disposable income

Figure 9.1

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