The equation C = 45 + 0.75Y, where C is consumption and Y is income, tells us that…

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households will consume forty five cents of whatever level of disposable income they receive.

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induced consumption is 75+45=120.

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households will consume R45 if their disposable income is zero.

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households will save R45 if their disposable income is zero.

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there is an unknown relationship between disposable income and consumption.

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