Answer: Disposable income = $100.
Explanation:
Since we have given that
[tex]C=\$25+0.75Y[/tex]
And, average propensity to consume = 1
i.e. APC = 1
As we know the formula of APC ,
[tex]APC=\frac{C}{Y}=1\\\\\implies C=Y[/tex]
So, our equation becomes,
[tex]Y=\$25+0.75Y\\\\Y-0.75Y=\$25\\\\0.25Y=\$25\\\\y=\frac{25}{0.25}\\\\Y=100[/tex]
Hence, Disposable income = $100.
