The consumption function shows a
A) positive relationship between disposable income and consumption expenditure.
B) positive relationship between an individual's wealth and his or her consumption expenditure.
C) negative relationship between disposable income and consumption expenditure.
D) negative relationship between consumption expenditure and aggregate saving.

Question

Quizplus · Accepted Answer

The consumption function illustrates the positive relationship between disposable income and consumption expenditure. As disposable income increases, individuals will have more funds available to spend on goods and services, resulting in increased consumption expenditure.

The Consumption Function Shows a