Q.3.4Year(Base year)2018201920202021Cost of a basket (R) of consumergoods/servicesExplain, with the aid of an equation, the components of the consumptionfunction.1850219023802560

Answered: Q.3.4 Explain, with the aid of an…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q.3.4
Year
(Base year)
2018
2019
2020
2021
Cost of a basket (R) of consumer
goods/services
Explain, with the aid of an equation, the components of the consumption
function.
1850
2190
2380
2560

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Step 1

The consumption function that is also known as the Keynesian consumption function, is a mathematical expression expressing the functional connection between total consumption and gross domestic product. John Maynard Keynes, a British economist, introduced it and said it could be used to monitor and foresee total aggregate consumer spending.

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