The consumption function is the relationship between ________, other things remaining the same.
A) consumption expenditure and saving
B) consumption expenditure and the price level
C) consumption expenditure and disposable income
D) net taxes and disposable income
E) consumption expenditure and net taxes

Question

Quizplus · Accepted Answer

The consumption function shows the relationship between consumption expenditure and disposable income, assuming that other factors such as the price level, net taxes, and savings remain constant. It is represented as C = a + bYd, where C is consumption, a is autonomous consumption, b is the marginal propensity to consume, and Yd is disposable income. Therefore, choice C is the correct answer.

The Consumption Function Is the Relationship Between ________, Other Things