What will be the consumption (C) if b =

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Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Determination of Income and Employment

Question:

What will be the consumption (C) if b = 0.5 and income (y) is 500 and c̅ = 100?

Options:

450

350

250

150

Correct Answer:

350

Explanation:

C = c̅ + bY

C = 100 + 0.5 ( 500 )

C = 100 + 250

C = 350