The relationship between consumption expenditure and disposable income is called the
A) consumption function.
B) household aggregate demand function.
C) investment function.
D) savings function.

Question

Quizplus · Accepted Answer

The relationship between consumption expenditure and disposable income is known as the consumption function. Therefore, option A is the correct answer. Option B is incorrect because it refers to household aggregate demand, which is a broader concept that takes into account not only consumption but also investment, government spending, and net exports. Option C refers to investment, which is a separate macroeconomic concept. Option D refers to the relationship between saving and disposable income, which is not directly related to consumption expenditure.

The Relationship Between Consumption Expenditure and Disposable Income Is Called