The consumption function shows the relationship between consumer expenditures and:
A) the interest rate.
B) the tax rate.
C) savings.
D) disposable income.

Question

Quizplus · Accepted Answer

The consumption function shows the relationship between consumer expenditures and disposable income. As disposable income increases, consumers are more likely to spend more and vice versa. The interest rate and tax rate can impact consumer spending, but they are not directly related to the consumption function. Savings, while related to disposable income, are not the focus of the consumption function.

The Consumption Function Shows the Relationship Between Consumer Expenditures And