Question

When C = 100 + 0.5y and y = 1200, autonomous consumption will be:- 1

a) 100 b) 1000 c) 500 d) 600​

Answer 1

when c= 100+0.5y andy=1200,d is the answer

Answer 2

Explanation:

Here,

C=100+0.5y , Y= 100 , autonomous consumption=?,

formula of consumption function=

C = autonomous consumption + bY

step:1) 100+0.5×100 = autonomous consumption+(1-0.5)×100

step:2) 150 = autonomous consumption+50

step:3) 150-50=autonomous consumption

step:4) 100= autonomous consumption

option (A) is correct