What would be total consumption from the following data if disposal income is Rs. $2000$ and consumption function is $C = 400 + 0.6$ Yd.?

Rs.

1200

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Rs.

1600

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Rs.

1400

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Rs.

1000

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Solution

The correct option is D Rs. $1600$
C=400+0.6Yd
Yd = $2000$
$C = 400 + 0.6$ (2000)
= $1600$

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What would be total consumption from the following data if disposal income is Rs. 2000 and consumption function is C=400+0.6Yd.?

The correct option is D Rs. 1600C=400+0.6Yd Yd = 2000C=400+0.6(2000)=1600

What would be total consumption from the following data if disposal income is Rs. $2000$ and consumption function is $C = 400 + 0.6$ Yd.?

The correct option is D Rs. $1600$
C=400+0.6Yd
Yd = $2000$
$C = 400 + 0.6$ (2000)
= $1600$