emily4151
Answered

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If the consumption function is defined as C = 5,500 + 0.9Y, what is the
autonomous level of consumption expenditure?
A. $4,950
B. $5,500
C. $6,050
D. $6,111

Sagot :

Cricetus

Answer:

Option B ($5,500) is the appropriate choice.

Explanation:

The given expression is:

⇒  [tex]C = 5,500 + 0.9Y[/tex]

At the zero (0) level of income, the consumption would be the Autonomous consumption.

then,

Y = 0

On substituting the value of "Y" in the given expression, we get

⇒  [tex]C=5,500+0.9(0)[/tex]

⇒      [tex]=5,500+0[/tex]

⇒      [tex]=5,500[/tex] (%)

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