The consumption function implies that
A)Disposable income inversely influences consumption.
B)Consumption increases as disposable income increases.
C)Autonomous consumption changes when people have low incomes.
D)None of the choices are correct.

Question

Quizplus · Accepted Answer

The consumption function states that as disposable income increases, consumption also increases. Therefore, choice B is the correct answer. Choice A is incorrect because disposable income has a positive influence on consumption. Choice C is incorrect because autonomous consumption is not influenced by changes in income. Choice D is incorrect because choice B is the correct answer.

The Consumption Function Implies That