Consumption function: Difference between revisions
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An equation which defines the relationship between consumption and income. | An equation which defines the relationship between consumption and income. | ||
Revision as of 06:41, 3 August 2013
Economics.
An equation which defines the relationship between consumption and income.
Usually defined as: C = a + bY where C = consumption,
a = consumption at zero income,
b = marginal propensity to consume, and
Y = income.
