# Based on the consumption function C = \$200 billion + .8Yd, if disposable income increases by \$200 billion, planned consumption? the answer is 160 billion. but hwy do i only times .8 by 200 billion? and not just times it get 160 billion and then do 160 times 200 billion and then i will get the answer.why is this way wrong?

I hope that the question is asking you what happens to planned consumption.  Because the answer to that would be that planned consumption goes up by \$160 billion.

The reason for that is that Yd is the disposable income and .8 is the marginal propensity to consume.  That means that every time people get an extra \$100, they will spend \$80 of it (and save the other \$20).  So to figure out what happens when people get \$200 billion extra, you just multiply \$200 billion by .8 and that's where you get your answer -- if they get \$200 billion more, they will spend \$160 billion of it.

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