Which of the following statements about the consumption function is true?
A) The consumption function describes the relationship between aggregate consumption and the price level.
B) The consumption function describes the relationship between aggregate consumption and the level of national income.
C) The consumption function describes all equilibrium levels of income where aggregate saving and investment are equal.
D) The consumption function describes the relationship between aggregate consumption and the wealth.

Question

Quizplus · Accepted Answer

The consumption function, as defined in Keynesian economics, describes the relationship between total consumption and gross national income, indicating how income changes affect consumption levels.

Which of the Following Statements About the Consumption Function Is