The consumption schedule shows the relationship of household consumption to the level of:
A) Saving
B) Investment
C) Disposable income
D) The marginal propensity to consume

Question

Quizplus · Accepted Answer

The consumption schedule shows how much households consume at different levels of disposable income. Therefore, the correct answer is C as disposable income is the independent variable that affects household consumption. Saving and investment are not directly related to the consumption schedule, while the marginal propensity to consume is a concept that measures the relationship between changes in income and changes in consumption, but it is not the variable plotted on the consumption schedule.

The Consumption Schedule Shows the Relationship of Household Consumption to the Level