Assume a = 150, b = 0.75, I = 200, Yf = 1600.
Find the value of consumption at the equilibrium level of output and income.
The term consumption refers to the fraction of individual income not used for saving and investment purposes. There are two of consumption - autonomous consumption and induced consumption.
Answer and Explanation: 1
The correct answer is the value of consumption at the equilibrium level of output and income is 1,200.
The Consumption function can be written as:
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fromChapter 45 / Lesson 2
Learn about consumption in economics. Read examples of consumption in economics and find out 4 types of consumption in economics, what affects it, and how it is measured.