Consumption function: Difference between revisions
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The consumption function is an equation which defines the relationship between consumption and income. | |||
Revision as of 21:26, 1 January 2018
Economics.
The consumption function is 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.
