(Advanced analysis) The equation C = 35 + . 75Y , where C is consumption and Y is disposable income, shows that:
A)households will consume three-fourths of whatever level of disposable income they receive.
B)households will consume $35 if their disposable income is zero and will consume three-fourths of any increase in disposable income they receive.
C)there is an inverse relationship between disposable income and consumption.
D)households will save $35 if their disposable income is zero and will consume three-fourths of any increase in disposable income they receive.
Answer:B
(Advanced analysis) The equation C = 35 + . 75Y , where C is consumption and Y is disposable income, shows that:
A)households will consume three-fourths of whatever level of disposable income they receive. B)households will consume $35 if their disposable income is zero and will consume three-fourths of any increase in disposable income they receive. C)there is an inverse relationship between disposable income and consumption. D)households will save $35 if their disposable income is zero and will consume three-fourths of any increase in disposable income they receive.