Consider the simple economy of Behr, whose government does not tax its citizens. The consumption function of Behr is given by: C=500+.8Y, where Y is income. the autonomous consumer spending in this economy is:
A. $1000
B. $800
C. $500
D. $.80
E. $1800
500
1000
To find the autonomous consumer spending in the given economy, we need to look at the consumption function C=500+.8Y.
In this function, the constant term '500' represents the autonomous consumer spending. It is the amount that people in the economy will spend, regardless of their income.
Therefore, the autonomous consumer spending in this economy is $500.
Hence, the correct answer is C. $500.