Question

If consumption is $820 and savings is $60, then disposable income is:

A. $760
B. $820
C. $880
D. Cannot be determined.

Answer 1

When consumption is $820 and savings is $60, the disposable income is the sum of consumption and savings, which equals $880. Hence, the answer is C. $880.

Step-by-step explanation:

If consumption is $820 and savings is $60, then disposable income is calculated by adding the consumption and savings. Since consumption plus savings must equal disposable income, we use the formula:

Disposable income = Consumption + Savings

Substituting in the given values:

Disposable income = $820 + $60

Disposable income = $880

Therefore, the correct answer is C. $880.