If consumption is $6.9 billion when income is $1 billion and if the marginal propensity to consume is frac{dC}{dy} = 0.5 + frac{0.2}{sqrt{y}} (in billions of dollars) find the national consumption function. C(y) =
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We know that the consumption function has the form: $C(Y) = a + bY$, where $a$ is the autonomous consumption, $b$ is the marginal propensity to consume (MPC), and $Y$ is the income. Show more…
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