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.

Question

Quizplus · Accepted Answer

The consumption function is typically represented as C = a + bYd, where C is consumption spending, Yd is disposable income and a and b are constants. Therefore, the consumption function describes the relationship between consumption spending and disposable income, making choice C the best answer.

The Consumption Function Describes the Relationship Between