According to Keynes's Consumption function, a) Consumption spending is a function of disposable (after-tax) income (Yd). b) There cannot be any consumption without disposable income. c) Total consumption spending is composed of autonomous consumption, independent of income (Ca), and induced consumption, determined by disposable income. d) The induced consumption component is equal to a constant proportion of disposable income. e) The induced consumption is equal to the marginal propensity to consume times disposable income f) The consumption function Is modified in the Lecture Notes to a simplified version where consumption is a function of real income. g) Autonomous consumption cannot be changed by other factors.
According to Keynes's Consumption function,
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a) Consumption spending is a function of disposable (after-tax) income (Yd). |
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b) There cannot be any consumption without disposable income. |
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c) Total consumption spending is composed of autonomous consumption, independent of income (Ca), and induced consumption, determined by disposable income. |
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d) The induced consumption component is equal to a constant proportion of disposable income. |
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e) The induced consumption is equal to the marginal propensity to consume times disposable income |
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f) The consumption function Is modified in the Lecture Notes to a simplified version where consumption is a function of real income. |
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g) Autonomous consumption cannot be changed by other factors. |
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