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What is the value of autonomous consumption from the given consumption function?

C=150+0.8YC=150+0.8Y

Solution

✅ Correct Option: 2

In the consumption function C=Cˉ+cYC = \bar{C} + cY, the intercept Cˉ\bar{C} is autonomous consumption, i.e. consumption when income is zero. Here C=150+0.8YC = 150 + 0.8Y, so autonomous consumption is 150.

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