In a simple economy (assume there are no taxes, thus, Y is disposable income), the consumption function is:
1 answer:
Using linear function concepts, it is found that consumption would increase by $800.
<h3>What is a linear function?</h3>A linear function is modeled by:
In which:
- m is the slope, which is the rate of change, that is, by how much y changes when x changes by 1.
- b is the y-intercept, which is the value of y when x = 0.
In this problem, the function is given by:
C = 200 + 0.8Y.
Which means that the slope is of m = 0.8 per unit of Y.
For 1000 units:
0.8 x 1000 = 800.
Consumption would increase by $800.
More can be learned about linear function concepts at brainly.com/question/24808124
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