1.Part 1: 20 questions worth 3 points each for a total of 60 points. FOR FILL-IN-THE-BLANK questions:If your answer is in decimal form, round to 2 decimal places. For example, if your answer is .412, enter it into the fill-in-the-blank as .41, or if your answer is 1.415, enter it into the fill-in-the-blank as 1.42. If there are no decimals in your answer, you will simply enter the number; so if your answer is 2, enter 2 with no decimals. Do not enter any extra spaces, do not enter commas or $ or % symbols.Suppose the consumption function is: C = a1Yd+ a2WRE/S + a3CC Where all the a’s (the sensitivity parameters) are greater than zero. Initial conditions: Let a1= 0.60, a2= 0.04, a3= 0.5, WRE/S = 18,000: CC = 90 Solve for C in terms of Yd.Select the correct equation below.A) C = 720 + .60 YdB) C = 765 + .60 YdC) C = 765 + .64 YdD) C = 90 + .60 YdE) None of the above are correctTable for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):B2.Use the equation you found in #1 and let Yd= 2000. C is equal to .Table for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):19653.Suppose that the stock market rallies so that WRE/S increases to 22,000. Additionally, consumer confidence (CC) rises to 100. Re-solve for C in terms of Yd. Select the correct equation below.1965

Table for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):D4.Now suppose disposable income (Yd) falls due to a tax increase (Uncle Sam is trying to balance the budget) to 1800. Solve for the level of consumption using the equation you found in #3. Consumption (C) is equal to .