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. | ||
Usually defined as: | |||
b = marginal propensity to consume | C = a + bY | ||
Where: | |||
C = consumption. | |||
a = consumption at zero income. | |||
b = marginal propensity to consume. | |||
Y = income. | Y = income. | ||
== See also == | == See also == | ||
* [[Marginal propensity to consume]] | * [[Marginal propensity to consume]] | ||
Revision as of 11:59, 21 March 2015
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.
Y = income.
