The consumption function expresses the relationship between consumption spending and
A) investment spending.
B) aggregate supply.
C) disposable income.
D) savings.
E) the 45-degree line.

Question

Quizplus · Accepted Answer

The consumption function relates consumption spending to disposable income. This relationship is typically depicted graphically as a line with disposable income on the x-axis and consumption on the y-axis. As disposable income increases, consumption generally increases but at a diminishing rate.

The Consumption Function Expresses the Relationship Between Consumption Spending and