Question 9 (1 point) The consumption functions shows a Question 9 options: negative relationship between consumption and disposa

Question

3 years ago

15

Question 9 (1 point) The consumption functions shows a Question 9 options: negative relationship between consumption and disposa

ble income positive relationship between consumption and disposable income positive relationship between consumption and price level. positive relationship between consumption and saving

Business

1 answer:

evablogger [386] · Answer 1 · 2022-06-08T23:03:14+03:00

Answer:

positive relationship between consumption and disposable income

Explanation:

The consumption function shows the relationship between consumer spending and disposable income.

the formula used to calculate consumption function is:

C = A + MY

C = consumer spending
A = autonomous spending
M = MPC or marginal propensity to consume
Y = disposable income

The consumption function has a upward slope since the relationship between consumer spending and disposable income is always positive, i.e. the more disposable income you have, the more you will consume.