The consumption function shows how much
A) real disposable income people will earn at each income tax bracket.
B) all households plan to consume at each possible real interest rate.
C) all households plan to consume at each level of savings.
D) all households plan to consume at each level of real disposable income.

Question

Quizplus · Accepted Answer

The consumption function shows how much all households plan to consume at each level of real disposable income. It illustrates the relationship between disposable income and consumption, as changes in income affect how much people plan to spend.

The Consumption Function Shows How Much