In macroeconomics,the consumption function
A)and the aggregate expenditure function are the same.
B)describes the relationship between desired consumption expenditure and the factors that determine it,like national income.
C)refers to the relationship between consumption expenditure and relative prices.
D)refers to the relationship between an individual's consumption and his/her wealth.
E)is relatively unimportant in macroeconomics,because consumption is such a small component of aggregate expenditure.

Question

Quizplus · Accepted Answer

The consumption function describes the relationship between desired consumption expenditure and the factors that determine it, like national income. It is an important concept in macroeconomics as consumption expenditure is a major component of aggregate expenditure, which determines a country's GDP.

In Macroeconomics,the Consumption Function