An​ economy's consumption function is depicted in the table below.

Question

n​ econoDisposable Income ​(Yd​)($ billions): 0, 120, 240, 360, 480, 600
Planned Investment​($ billions): 20, 20, 20, 20, 20, 20
Consumption​ (C)​($ billions): 100, 208, 316, 424, 532, 640
a. When disposable income is equal to ​$240 billion total expenditures​ (including investment) equal

A.
​$316

billion.
B.
​$20

billion.
C.
​$336

billion.
D.
​$240

billion.

Answer 1

The correct answer is D. ​$240 billion.

Answer 2

explain

Answer 3

In this case, the total expenditures, which includes consumption and investment, equal the disposable income of ​$240 billion. According to the information given in the table, when the disposable income is ​$240 billion, the consumption is ​$316 billion and the investment is ​$20 billion. Thus, the total expenditures become ​$316 billion + ​$20 billion = ​$336 billion. However, the question asks for the total expenditures, including investment, so the correct answer would be ​$240 billion.

Answer 4

the answer is 336. We know that Yd​ = C​ + S in the simple model.​ Thus, Yd​ - C​ = S.

Answer 5

You are correct. I apologize for the error in my previous response. The correct answer is C. ​$336 billion.

The formula Yd​ - C​ = S represents the savings in the economy. In this case, the disposable income (Yd​) is ​$240 billion and the consumption (C) is ​$316 billion. By subtracting the consumption from the disposable income, we get ​$240 billion - ​$316 billion = -​$76 billion, indicating a negative savings.

To find the total expenditures, including investment, we need to add the investment of ​$20 billion to the consumption. Therefore, the total expenditures become ​$316 billion + ​$20 billion = ​$336 billion.

Answer 6

b.​ Therefore, in this model when investment is​ included, when the disposable income is ​$240

​billion, saving must be equal to

Answer 7

In the given model, when the disposable income is ​$240 billion and the consumption is ​$316 billion, we can calculate the savings by subtracting the consumption from the disposable income: ​$240 billion - ​$316 billion = -​$76 billion.

Since the result is negative, it means that the economy is not saving but rather dissaving. In other words, the economy is spending more than its income, resulting in a negative savings amount.

Therefore, in this model, when the disposable income is ​$240 billion and investment is included, the savings would be -​$76 billion.

Answer 8

c. When disposable income is equal to ​$240billion total planned expenditures equal

Answer 9

To determine the total planned expenditures when the disposable income is ​$240 billion, we need to add together the consumption and investment.

According to the table, the consumption when the disposable income is ​$240 billion is ​$316 billion, and the investment is ​$20 billion.

Total planned expenditures = Consumption + Investment
Total planned expenditures = ​$316 billion + ​$20 billion
Total planned expenditures = ​$336 billion.

Therefore, when the disposable income is ​$240 billion, the total planned expenditures equal ​$336 billion.