In the Keynesian linear consumption function Y=?1+?2X, X represents
A)income
B)consumption expenditure
C)output
D)price

Question

Quizplus · Accepted Answer

In the Keynesian linear consumption function, Y = ?1 + ?2X, X represents income. This model suggests that consumption (Y) is a linear function of income (X), with ?1 being the autonomous consumption (consumption when income is zero) and ?2 representing the marginal propensity to consume (the increase in consumption for each additional unit of income).

In the Keynesian Linear Consumption Function Y=?1+?2X, X Represents