The consumption function relates
A) a household's consumption to its wealth.
B) planned household consumption to real disposable income.
C) planned household consumption and real interest rates.
D) real disposable incomes earned by households with the level of unexpected consumption spending.

Question

Quizplus · Accepted Answer

The consumption function relates planned household consumption to real disposable income. This means that as a household's income increases, their consumption is likely to also increase, but not necessarily at the same rate.

The Consumption Function Relates