The consumption function assumes that:
A)only disposable income affects consumption.
B)only the price level affects consumption.
C)many factors other than disposable income affect consumption,and each is allowed to vary along the consumption function.
D)factors other than disposable income affect consumption,but those are held constant along the consumption function.
E)only consumer expectations affect consumption.

Question

Quizplus · Accepted Answer

The consumption function primarily focuses on how disposable income affects consumption, but it acknowledges that other factors can influence consumption as well. These other factors, however, are held constant to isolate the effect of changes in disposable income on consumption.

The Consumption Function Assumes That