Question

The consumption function shows how an increase in​ ______ influences​ ______. A. disposable​ income; consumption expenditure B. nominal​ GDP; consumption expenditure C. consumption as a fraction of​ income; real GDP D. ​income; households' aggregate planned expenditure

Answer 1

A. disposable​ income; consumption expenditure

Step-by-step explanation:

Consumtion function show relationship between disposable income and consumer expenditure that how increase in disposable income influence the spending of consumer and consumer start spending more money, however, at slow rate in proportion to thier increase in disposable income.

Consumtion funtion depend on three factors:

• Disposable income.
• Autonomous consumption.
• Marginal propensity to consume.