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user100 [1]
3 years ago
12

assume that autonomous consumption is $1610 billion and disposable income is $11,200 billion. Using the consumption function, ca

lculate consumption expenditure
Business
1 answer:
Viefleur [7K]3 years ago
6 0

Answer:  $9,226

Explanation;

The consumption function is;

Consumption = Autonomous consumption + (Marginal Propensity to consume * Disposable income)

Marginal Propensity to Consume;

=Increase in consumption expenditure/  Increase in Disposable income

= 680/1,000

= 0.68

Consumption = Autonomous consumption + (Marginal Propensity to consume * Disposable income)

= 1,610 + ( 0.68 * 11,200)

= $9,226

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