Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:An economy's consumption function is depicted in the table below.
Disposable Income (Y) Planned Investment Consumption (C)
($ billions)
($ billions)
($ billions)
0
50
120
50
240
50
360
50
480
50
600
50
a. When disposable income is equal to $240 billion total expenditures (including investment) equal
OA. $342 billion.
OB. $50 billion.
b. Therefore, in this model when investment is included, when the disposable income is $240 billion, saving must be equal to
OB. $-102 billion.
O C. -0.22.
OA. $-52 billion.
100
196
292
388
484
580
OC. $240 billion.
OD. $292 billion.
OD. $50 billion.
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