Question

If the consumption function is defined as C = 5,500 + 0.9Y, what is the

Answer 1

Answer:

Option B ($5,500) is the appropriate choice.

Explanation:

The given expression is:

⇒  $C = 5,500 + 0.9Y$

At the zero (0) level of income, the consumption would be the Autonomous consumption.

then,

Y = 0

On substituting the value of "Y" in the given expression, we get

⇒  $C=5,500+0.9(0)$

⇒      $=5,500+0$

⇒      $=5,500$ (%)