use the consumption function shown to answer the following questions. at what level of income is consumption…

use the consumption function shown to answer the following questions. at what level of income is consumption equal to disposable income? $80 billion. which of the following statements is true? a. at an income level of $80 billion there is dissaving equal to $40 billion. b. consumption is $10 billion when the income level is $100 billion. c. saving equals consumption at an income level of $80 billion. d. at an income of $100 billion there is dissaving of $10 billion.

use the consumption function shown to answer the following questions. at what level of income is consumption equal to disposable income? $80 billion. which of the following statements is true? a. at an income level of $80 billion there is dissaving equal to $40 billion. b. consumption is $10 billion when the income level is $100 billion. c. saving equals consumption at an income level of $80 billion. d. at an income of $100 billion there is dissaving of $10 billion.

Answer

Brief Explanations:

Dis - saving occurs when consumption exceeds income. Saving equals consumption at the break - even point. Analyze each option based on the relationship between income and consumption. For option A, when income is $80 billion and dis - saving is $40 billion, consumption is $80 + 40=120$ billion which is not consistent with normal economic relationships. For option B, when income is $100 billion and consumption is $10 billion, saving is high, not dis - saving. For option C, when income is $80 billion and saving equals consumption, it doesn't match typical economic scenarios. For option D, when income is $100 billion and dis - saving is $10 billion, consumption is $100 + 10 = 110$ billion which is a valid case of dis - saving.

Answer:

D. At an income of $100 billion there is dissaving of $10 billion.