The consumption function describes the relationship between
A)consumption spending and national income.
B)consumption spending and aggregate income.
C)consumption spending and disposable income.
D)consumption spending and personal income.
E)consumption spending and interest rates.

Question

Quizplus · Accepted Answer

The consumption function specifically describes the relationship between consumption spending and disposable income, which is the national income minus taxes and transfers. Therefore, the correct choice is C. The other choices are not as accurate, as the consumption function does not necessarily have a direct relationship with them.

The Consumption Function Describes the Relationship Between